Dany Assaf is co-chairman of the competition and foreign-investment group at Torys LLP in Toronto. He has also published extensively on business legal issues, including co-authoring a leading treatise on Canada/U.S. competition laws.
'I'd shut it down and give the money back to the shareholders."
That's what Michael Dell, founder of Dell Computers, said in 1997 when asked what he would do if he were running then-struggling Apple Inc.
At the time, few would have been in a better position to make a call on Apple's future, with the rise of the PC and the demise of Apple's Macintosh apparently imminent. But as the saying goes, it's tough to make predictions, especially about the future. In today's markets, such predictions are even more complex, because, while markets are always moving, economic and political power is shifting globally as never before.
At the same time as this shift, there may or may no longer be a "Washington consensus" to bind our global economic thinking. Meanwhile, the connectivity provided by gadgets of all sorts have put people and populations beyond the reach of many traditional rules and regulations. That leaves us with one primary sphere of influence, which also happens to be one of the most difficult forces to harness and restrain: market forces. The adage that markets will rule has never been more true – modern technology and developments have pushed us into new territory, both literally and figuratively.
Without the checks and balances of clear convention or consensus, or the inherent technological limitations of previous generations, competition regulators are increasingly having to step in to try to make sense of these developments for us.
European regulators are taking on shades of a geopolitical role with the investigation of OAO Gazprom for – among other things – excessive pricing in the midst of the Russia-Ukraine conflict and the investigation of Google in a United States-European Union Internet antitrust battle. These new wars are about which companies (Google Inc., Amazon.com Inc., Alibaba Group Holding Ltd., Facebook Inc., Twitter Inc., Apple Inc.) and which issues (net neutrality, security, privacy, convenience) will define the Internet. As a result, we see competition law having to become, almost by default, a first point of hard contact for many of these questions.
Here are the issues:
– How can competition authorities regulate without becoming market alchemists, trying to predict market outcomes and winners and losers?
– As global consensus fades and economic and political power shifts, Canadian and Western businesses increasingly need to seek access to foreign markets – can we apply a principled approach to market rules at home to credibly promote those principles abroad?
– How can businesses and business people play a greater role in shaping policy, with longer-term and more holistic horizons that will resonate with customers, shareholders and citizens?
In that sense, – as a transnational force that provides opportunity – business needs to step up, take greater collective leadership and seize more of the agenda to create consensus where government used to play the primary role. Business is nowhere near perfect, and it's just one stakeholder, but it provides a strong framework for beginning this alternative process. Everyone – regardless of geography or political creed – is bound by the need to use business in some way or another to provide for their families.
Of course, other important stakeholder groups must also be brought in to contribute and refine. Then shaping our global economic future can truly be everyone's business.
Otherwise, it won't be the Michael Dells of the world but competition authorities who remain virtually alone on the front lines of these battles, attempting to predict market winners and losers. The iPhone stands as proof of how easy that is.