(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

Buffalo Lake Nature Club aims to draw youth to the outdoors

Organization looking for person to spearhead nature activities for youth, children

Sylvan Lake’s Flags of Remembrance looks to fill all 128 spots

Allan Cameron says there are still a handful of honour plaques available for the 2019 event

Castor Minor Sports is hosting a ‘Battle of Alberta’ NHL Alumni game on March 29th, 2020

Eleven community members per team will skate side by side with NHL veterans

Castor ‘Cares 4 Kids’ program at risk of shutting down due to lack of funds

Currently six to 10 families a year make use of the program

Paintearth Economic Partnership Society (PEPS) hosted their eighth annual ‘Eat-Local Supper’

All ingredients were sourced locally in Central Alberta and prepared by local caterer Michelle Breum

VIDEO: Liberals make child care pledge, Greens unveil platform on Day 6 of campaign

Green party leader Elizabeth May unveils her party’s platform in Toronto

Outspoken Imperial Oil CEO Rich Kruger stepping down later this year

Imperial Oil is about 70 per cent owned by Texas-based Exxon Mobil Corp., since 2013

‘Time to take action:’ Children advocates call for national youth suicide strategy

Council wants Ottawa to make reporting of suicides and attempted suicides mandatory for data collection

Canadian inflation decelerates to 1.9% as gas prices weaken

August was the sixth straight month that price growth was 1.9 per cent or higher

Alberta spends $3M to hire 30 nurse practitioners for remote areas

Province has 600 nurse practitioners, but minister says most work in hospitals or outpatient clinics

Rick Mercer calls out Conservative candidate in B.C. for fake meme

‘Not true. All fake. Please Stop,’ tweeted Rick Mercer in response

Sylvan Lake man charged with wife’s murder

Satnam Singh Sandhu, 41, will appear in Red Deer Provincial Court on Sept. 18

National weather forecasters predict average fall, cold winter

The Weather Network says precipitation will about average in most parts of Canada

Most Read