(Pexels)

Watchdog looks into anti-competition practices in the digital economy

Work will touch on online search, social media, display advertising and online marketplaces

Canada’s competition watchdog wants information on what companies in the digital economy may be doing to harm competition as part of a ramp up in scrutiny on the practices of digital behemoths.

“Since certain digital markets tend towards a ‘winner takes all’ outcome, firms in these markets have a strong incentive to adopt strategies that increase the likelihood the market tips in their favour, and stays that way,” said the Competition Bureau in a paper explaining the public consultation Wednesday.

Businesses and other interested parties “likely to have valuable information on competition” in core digital markets can share it confidentially, the Competition Bureau said in a statement, adding companies doing business in these markets, industry associations and venture capital firms may be well positioned to do so.

The bureau is looking for information on strategies firms may use to hinder competition in some core digital markets, like online search, social media, display advertising and online marketplaces.

The move comes as it examines concerns that these markets have become increasingly concentrated, hurting consumers and businesses, it said in the paper.

If this is the case, the bureau wants to know if it is because digital markets may favour a single victorious firm over a number of smaller successes. This process is called tipping and tends to happen when the company benefits from having a widely used product, like a social media platform that an individual’s friends and family also frequent. It also depends on economies of scale, as well as access to large amounts of data.

The other possible explanation, the bureau said, could be because current market leaders did not outperform their competitors, but succeeded by stifling competition.

Anti-competitive strategies would likely be geared at protecting a core market or capturing adjacent markets. Such strategies could include refusing to deal with competitors, prohibiting suppliers from providing rivals with better prices or terms, or buying out rivals.

“If not addressed in a timely fashion, such strategies — which effectively prevent competition on the merits — are likely to make it that much more difficult for new firms to successfully compete in the market,” the bureau, which acknowledges the two explanations may be complementary, said.

The bureau will keep information provided to it confidential and should be submitted by November 30 via an online form on its website or to an email address.

The information could be used to inform potential investigations or help it develop guidance for companies participating in the digital economy.

The news comes on the heels of a July report from the bureau’s Australian counterpart, which made several recommendations after examining the impact of online search engines, social media and digital content aggregators on competition in the media and advertising services markets.

Meanwhile the European Commission announced that same month that it opened a formal antitrust investigation into Amazon. It is looking “to assess whether Amazon’s use of sensitive data from independent retailers who sell on its marketplace is in breach of EU competition rules.”

Also in July, the U.S. Department of Justice opened an antitrust investigation into “whether and how market-leading online platforms have achieved market power and are engaging in practices that have reduced competition, stifled innovation, or otherwise harmed consumers.”

ALSO READ: Facebook cracks down on groups spreading harmful information

The Canadian Press


Like us on Facebook and follow us on Twitter.

Just Posted

Lacombe pitcher throwing for NCAA D1’s Niagara University next year

Myles Pallister recently signed with the school after a stellar summer representing his province

AA Lacombe Generals name change official after confusion forces team to forfeit win

GM, head coach suspended, reinstated after mix-up; win over Blackfalds forfeited

ROAD CLOSURES: Upcoming Lacombe Santa Claus Parade road closures

A number of detours will be set up around the parade route

‘High-Tech Dairy Facility’ to be built near Red Deer, Lacombe

20-acre site is large enough for future expansion and long-term growth

Rotary Clubs of Lacombe host 64th Rotary Christmas Carol Festival

Rotary Club also supports FCSS Fill-a-Fridge Christmas program

VIDEO: Lacombe honours those who fought for freedom

Remembrance Day ceremony welcomes 100s to LMC

1898 Yukon gold rush photo featuring Greta Thunberg look-alike sends internet into tailspin

Jokes erupted this week after a 120-year-old photo taken by Eric A. Hegg surfaced from archives

CN Rail strike and lack of trucking alternatives stoke forest industry fears

Companies calling on the federal government to ‘do everything in its power’ to end the strike

Prime Minister Justin Trudeau unveils new Liberal cabinet

Pivotal role in his new cabinet for a minority-government era goes to Chrystia Freeland

Trudeau to take sober approach to unveiling new cabinet for minority mandate

Liberals survived a bruising campaign that diminished Trudeau’s stature as a champion of diversity

Lowe’s says it will close 34 ‘underperforming’ stores across six provinces

The stores include 26 Ronas, six Lowe’s and two Reno-Depots

Notley kicked out of legislature for comment on election watchdog firing bill

When Speaker Nathan Cooper directed Notley to apologize, she refused

Members of little people community applaud change to drop ‘midget’ term

‘It’s not about sensitivity,’ says Allan Redford, the president of the Little People of Canada

Red Deer man facing 13 charges after late night pursuit

Leduc RCMP with assistance from Edmonton Police make arrest

Most Read