Comp. laws are too focused on price: Lawson Hunter

Canada's competition laws have become too sensitive to price, particularly in mergers, and should instead focus more on the role of innovation and change, according to a Canadian competition and regulatory lawyer. Lawson Hunter, a former senior civil servant involved in the drafting of the Competition Act and a former BCE Inc. executive vice-president, made the comments Monday at an International Institute of Communications conference panel on competition policy and the regulation of digital platforms. Hunter said he is "very cautious" about a competition approach that focuses on ex ante rules – rules based on predictions rather than returns – when it comes to big data and big tech. Competition laws, Hunter argued, have limits because outcomes are measured based on economic tests rather than public interest tests. He said there is a tendency to address issues in big data through the Competition Act as if the act "is somehow the panacea of all the ills in society." "Well it isn't, I tell you. And it's never going to be," Hunter said. Hunter said one of the problems with Canada's competition laws is the need to predict outcomes, especially in mergers or when determining abuse of dominance. "Antitrust authorities are not regulators. The bureau does not want to fix prices, by the way. They are opposed to price fixing. So one needs to be careful that you don't change the sort of fundamental nature of the agency in a desire to deal with a remedy that maybe time will tell wasn't that necessary," he said. Mark Schaan, senior assistant deputy minister for Innovation, Science and Economic Development (ISED), said the government is going to regulate digital platforms “by collaborative actions across the entirety of the ecosystem,” such as a modernization to the Privacy Act and the Online Streaming Act. “I think the government really is taking a kind of holistic approach to try and look at that whole continuum, both of the digital environment and then using the right tools,” he said. “Specifically on competition policy, we're taking a bit of a two pronged approach.” He noted that amendments tabled as part of the Budget Implementation Act (BIA) would allow private access to the Competition Tribunal to remedy abuse of a dominant firm’s position in the market, criminalize wage fixing and no poaching agreements between employers, reform how maximum fines are calculated, among other things. Hunter said the work done on the BIA is “not a bad job” as a starting point, however, “we need to be careful, as we move into this broader debate, that we don't allow these other sort of societal ills that sort of infect the competition regime in a way that will make it more unpredictable, more uncertain, and really not what it was designed to do in the first place.” He said the approach to enforcement in the competition act has become “too sensitive to price only” and does not focus enough on the other processes of competition. He noted that only six of approximately 200 paragraphs of the Competition Bureau’s merger guidelines mention innovation. “So really hasn't, doesn't, get the highlight, in my view, that it should,” he said. Hunter argued that the commissioner mainly looks at whether or not mergers will result in the removal of a “vigorous and effective competitor,” and noted that Alphabet Inc.’s YouTube and Meta Platforms, Inc.’s What’s App were once recruited by the antitrust authorities. “So I think that factor is too narrow. I don't think to be honest you've done enough in your amendments to address that issue,” he told Schaan. Hunter concluded that new developments in big tech, and the issues that come with it, are not always new and can fit in the old framework of the Competition Act. “I'm worried that the debate has moved a little bit to the view that government knows best, and the market doesn't and I personally think we need to be extremely careful about allowing that to become the watchword in Canada,” he said. – Reporting by Jenna Cocullo at jcocullo@thewirereport.ca and editing by Michael Lee-Murphy at mleemurphy@thewirereport.ca

Comp. laws are too focused on price: Lawson Hunter

Broadcast | May 16, 2022

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Comp. laws are too focused on price: Lawson Hunter

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