Competition Bureau appoints professor as advisor on digital economy

The Competition Bureau has brought on an expert in economics for a short-term position as part of its efforts to boost competition in digital and platform markets, while it continues investigations such as those into Alphabet Inc.’s Google and Amazon.com Inc. The body in charge of regulating competition in Canada appointed Heski Bar-Isaac to the position of special economic advisor for digital and platform markets for a six-month term, beginning July 9. Bar-Isaac is a professor of economics and finance with the University of Toronto’s Rotman School of Management. He has researched topics including how consumers search for products and how the availability of information affects consumer decision making, as well as the economics of advertising, reputation, and complex market structures, the Competition Bureau said. His current work focuses on the digital economy, algorithm design, and monopsony power, which is when one buyer has substantial control over the market as a purchaser of goods and services. The Competition Bureau said in a media release Tuesday it expects Bar-Isaac will assist it in shaping “key enforcement files” and informing policies. “Protecting competition in the digital economy is a top priority for the bureau. And Dr. Bar-Isaac brings valuable expertise and insight that will support the bureau’s enforcement and competition promotion mandate,” said Competition Bureau spokesperson Georgia Simone Fakiolas in an email to The Wire Report Wednesday. “In particular, his expertise from the economics perspective will be a strong complement to the work of our Digital Enforcement and Intelligence Branch.” Bar-Isaac, who also has a PhD from the London School of Economics and Political Science, was not available for an interview. In 2019, the bureau said it was looking into concerns that certain “core digital markets,” such as online searching, social media, display advertising, and online marketplaces, have become “increasingly concentrated, to the detriment of consumers and businesses.” At the time, the bureau was looking for input from stakeholders to understand whether or not that was the case, and if so, why. It raised two potential explanations in its call-out, being that certain digital markets may favour a single winner from a small group of winners, and that leading firms found success through anti-competitive strategies targeting existing or potential rivals, rather than by outperforming their competitors. Fakiolas said the 2019 call-out for information was “part of the bureau’s efforts to ensure that Canadians realize the full benefits of competition in the digital economy. “The bureau sought to gather information to help it reach informed and evidence-based conclusions about whether leading firms achieved or maintained their market position through anti-competitive conduct,” she said. Fakiolas said submissions received from the call-out were treated as confidential. She would not elaborate on whether that call-out relates to what Bar-Isaac will be working on, nor would she comment on any of the bureau’s open investigations. “As the bureau is required by law to conduct its work in private, I cannot discuss whether the call-out relates to Dr. Bar-Isaac’s work at the bureau or to any open investigations,” she said. “However, I can confirm the bureau is taking a close look at certain business conduct in digital markets, and whether it is harming competition. This work includes investigations into Amazon and Google.” Last month, the bureau was granted a court order compelling Amazon to provide it with detailed internal records related to user reviews and promotional badges, as part of its investigation into the marketing practices of the e-commerce giant. The watchdog has been investigating potential fake or misleading product reviews on Amazon’s platform since November 2021, after it received a complaint alleging that fake reviews exist on the site, some of which are traded through social media groups. The bureau said it has reason to believe that people are recruited and paid to make fake reviews for products sold on Amazon and that the Amazon platform promotes said products based on those reviews. “The bureau is looking to determine if Amazon’s marketing practices raise concerns under the deceptive marketing provisions of the Competition Act,” the watchdog said in a news release at the time. Earlier this year, in February, the bureau secured a similar court order in its separate investigation into Google’s online advertising practices in Canada. The probe, which commenced in 2020, has expanded focus, delving into whether Google’s conduct in the online display advertising sector is impeding competition. The bureau is exploring whether Google is leveraging its market power across various display advertising technology services, potentially resorting to predatory pricing tactics. The aim is to ascertain if such practices by Google adversely impact competition, consumer choice, and innovation within Canada’s online display advertising services market. The investigations into both Amazon and Google are ongoing at this time, and there has not been any conclusion of wrongdoing in either case. – Reporting by Hannah Daley at hdaley@thewirereport.ca with files from Phalen Tynes-MacDonald at pcreed@thewirereport.ca and The Wire Report staff. Editor’s note: This story was originally published July 9. It was updated July 10 to add quotes from a Competition Bureau spokesperson, further information on the bureau’s 2019 call for information, and details on the bureau’s investigations into Amazon and Google.

Competition Bureau appoints professor as advisor on digital economy

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By Hannah Daley
| July 10, 2024

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