(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

Sylvan Lake students visit with Speaker of the Legislative Assembly

Speaker Nathan Cooper visited Steffie Woima Nov. 14 as part of his outreach program

WATCH: Washboard Union opens bull riding weekend in Sylvan Lake

Country artists Jason Benoit and Washboard Union played to a full audience Nov. 14

Alberta Justice Minister advocates UCP rural crime plan

Expanded property rights, more power to peace officers, demonetizing scrap mental part of UCP plan

Sylvan Lake adopts new fire and fireworks bylaws

The change in the bylaw is to reflect the new National Fire Code 2019-Alberta Edition

Sylvan Lake artist to perform at BRC cabaret

Dylan Gillett will take to the stage Friday evening after the bull riders have finished

Listening to Christmas music too early could affect your mental health

Linda Blair, a clinical psychologist, says preemptive Christmas music can trigger anxiety

Supreme Court of Canada dismisses murder appeals in 2013 Calgary swarming death

Assmar Shlah and Franz Cabrera were convicted in 2016 of second-degree murder

One year on, most oil-and-gas bailout money has moved, federal government says

Sweden’s central bank says it has sold its Alberta-government issued bonds

Ski resorts selling mountain water is a risky move, critics say

Alberta allowed ski resort in Kananaskis Country to sell about 50 million litres to third party

Sportsnet looks at new options for Coach’s Corner time slot, post-Don Cherry

Spokesperson says Hall of Fame feature on tap this weekend after co-host’s firing

CN Rail confirms job cuts as weakening economy cuts into freight volumes

Railroad also said it was affected by a slowdown in the B.C.’s forestry sector

New case of vaping-related illness in Quebec brings national total to 8

Quebec health minister considering tightening the rules around vaping products

Greens to vote against Liberal throne speech unless carbon targets toughened: May

Green leader Elizabeth May and Prime Minister Justin Trudeau met Friday, discussing common ground

Alberta Opposition asks auditor general to review Kenney adviser’s London trips

The office declined to give details of the meetings, citing corporate confidences

Most Read