A new golden age for competition and antitrust is taking hold – and Canada can be part of it

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Keldon Bester is a co-founder of the Canadian Anti-Monopoly Project (CAMP) and a fellow with the Centre for International Governance Innovation. He has worked as a special adviser for the Competition Bureau.

In late 2022, an unusual scene unfolded in a New York courtroom: Author Stephen King, in an almost grandfatherly way, recounted a decades-ago lunch during which a publisher laughed at his proposed terms and walked out.

Does the publisher regret losing out on an early-career Mr. King?, the judge asked.

To laughter in the courtroom, Mr. King said the man “retired shortly thereafter.”

What had brought Mr. King to court that day was a big fight: The U.S. Department of Justice, which would go on to win, had sued to block the acquisition of Simon & Schuster by Penguin Random House, a megamerger that would have resulted in a giant with nearly 50 per cent of the market for top-selling books.

Mr. King’s testimony underscores what was at stake: Rejected rudely by a short-sighted publisher, Mr. King had gone on to have a successful career with a rival, in a marketplace teeming with individual book producers. But with a merged Penguin Random House and Simon & Schuster dominating the market, that scenario would be less likely. In other words, competition within industries is important.

It’s a sentiment that has echoed far and wide in recent years. The case of the publishing merger was just one milestone in a growing global antitrust movement that has produced a sprawling lawsuit against Google’s alleged monopolization of digital ad technology, two continuing German investigations into Amazon.com Inc.’s marketplace practices and new rules governing the conduct of major digital platforms in Europe.

In February, antitrust made it into the U.S. President’s State of the Union address for the first time since 1979.

Aimed at curbing the power of monopolies and empowering citizens, this movement could not have found a riper moment: a year of skyrocketing living costs, record corporate profits, the rolling onset of a housing crisis across many Western countries and, seemingly, everyone trying to buy each other, from Microsoft Corp. bidding for Activision Blizzard Inc., to a plethora of gold-mining deals and even proposed mergers between the big companies behind Korean pop stars.

Here in Canada, this antitrust movement might find its footing, too. It is, after all, what one would expect when 2022 was capped off with the Competition Tribunal’s approval of the merger of Rogers Communications Inc. RCI-B-T and Shaw Communications Inc. SJR-B-T in our oligopoly telecommunications market, and disastrous holiday travel conditions across what is, in effect, our duopoly air travel market.

How the Rogers-Shaw takeover deal made it past the Competition Tribunal

The phenomenon igniting this new global antitrust movement is certainly the shine coming off the major tech firms. Countries around the world have spent the past five years unearthing how these firms have used their power to shape market outcomes in their favour, and governments are now implementing robust legislative responses to rein in this power and restore fair competition.

But the consequences of monopoly extend well beyond the tech sector, highlighted by the focus of U.S. President Joe Biden’s executive orders on industries such as transportation, telecommunications and agriculture, as well as labour markets across the country.

Led by organizations such as Open Markets and the American Economic Liberties Project, the antitrust movement in the United States has had a notable list of achievements in recent years. Today, Lina Khan and Jonathan Kanter, both fierce antitrust advocates, head the Federal Trade Commission and Department of Justice Antitrust Division, the two federal arms of U.S. antitrust enforcement.

In 2021, Mr. Biden signed his Executive Order on Promoting Competition in the American Economy, detailing a whole-government approach to addressing monopoly power. In the waning days of the 2022 legislative session, U.S politicians enacted the biggest reforms to antitrust laws since the 1970s, in the face of strong corporate opposition.

Canada, on the other hand, does not have a history of anti-monopoly activity like the U.S. to guide the direction of this movement. A long time ago, rather than throwing off the monopolist East India Company as the fledgling United States did, the colonial monopoly of the Hudson’s Bay Company was woven through the fabric of our country’s founding.

Despite having some of the first explicitly anti-monopoly laws in the Western world, Canada’s history has been dominated by the view that monopolies are an accepted and even necessary component of our economy. Canada is captive to the received wisdom that as a small, trade-dependent country, we have little say over the future of our economy.

But middle-power countries such as Australia put the lie to this argument. The country not only led the world in its investigation of major tech platforms, but has also centred competition, backed up by a strong central enforcer, in its economic policy making since the 1990s.

We already see the stirrings of anti-monopoly energy building in Canada. The Competition Bureau’s spirited challenge of the Rogers-Shaw merger, in contrast to its passive response to Bell Canada’s 2017 acquisition of Manitoba Telecom Services Inc., and the federal government’s willingness to open the Competition Act to review can be seen as first steps in a more assertive handling of monopoly in this country.

With this new-found confidence, Canada could be on the path to strengthen its core competition law and to invest in an enforcer that has, until recently, been the concern mainly of just corporate lawyers and economists. With those reforms could also come the strengthening of protections against harmful mergers, giving the Competition Bureau the ability to study dynamic and evolving markets, and creating guardrails for fair competition.

The global nature of the most powerful corporations necessitates a global response, and we are in the middle of just such a response. Countries around the world are challenging a decades-old consensus on the role of monopolies in our society, rediscovering dormant powers and creating new ones. Canada can be a part of it, too.