💔 break ups

how will we know what to bust?

Vass Bednar

Sep 6, 2021

House Hunters Plots @HouseBudgets

HUSBAND: I sell sandals to bats WIFE: And I have a book about electro-grime BOTH, IN UNISON: Our budget is $1.5 million

ProMarket @ProMarket_org

"Academic research shows that breaking up Big Tech firms could help to address some antitrust issues but could also reduce the formation of new startups, especially if these startups complement Big Tech’s existing products and services."

The New Challenges of Assessing Big Tech’s Impact - ProMarketAcademic literature reveals the complexity of possible consequences of the new antitrust bills debated in the US Congress.promarket.org

The Conversation U.S. @ConversationUS

Lawmakers keen to break up 'big tech' like Amazon and Google need to realize the world has changed a lot since Microsoft and Standard Oil

Lawmakers keen to break up ‘big tech’ like Amazon and Google need to realize the world has changed a lot since Microsoft and Standard OilAs the government considers antitrust action against big US technology companies, a global business scholar identifies four myths that need busting first.bit.ly

Conversations about competition policy are often reduced to the knee-jerk conclusion that, “we should break up a large company.”

Toronto Star @TorontoStar

The first step in answering heady queries is tackling Facebook itself. It is clear it is far too big — and it’s time to cut it down to size. #Opinion by @navalang:

Opinion | It’s time to cut Facebook down in sizeWith 2.8 billion monthly users, Facebook is clearly far too big. For reasons of safety, the public good, competition and the future of the internet it...thestar.com

US antitrust authorities are considering whether and why WhatsApp and Instagram should be unbundled from Facebook.

Justin Hendrix @justinhendrix

3/ Five Key Points from the FTC’s Amended Facebook Complaint by @jason_kint:

Five Key Points from the FTC’s Amended Facebook ComplaintThe Federal Trade Commission piles on more evidence that Facebook is an anti-competitive monopolist, says Jason Kint.techpolicy.press

Some have mused that spinning out Amazon Web Services (AWS) could be a relief in advance of potential antitrust scrutiny.

What’s happening in Canada?

In their platform, the Conservatives have affirmed that, “companies that abuse their power should be broken up.” The thing is, Canadian competition authorities already have the ability to “break up” a company. “Divestiture” (the action or process of selling off subsidiary business interests or investments) is a remedy under “abuse of dominance.” This is notable, as the Investment Canada Act does *not* have the power to unwind mergers. Also notable: the Competition Bureau is in the habit of handing out Advance Ruling Certificates (ARCs). An ARC may be issued by the Commissioner to a party or parties to a proposed merger transaction who want to be assured that the transaction will not give rise to proceedings under section 92 of the Act. That means that a lot of firms have a guarantee that they won’t be reviewed again, thus preventing a break up.

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We literally already have this power, and then sometimes take it away from…ourselves.

I couldn’t find any evidence that we’ve ever successfully used this divestiture power in the past, *and* I couldn’t come up with an example of a Canadian company that people agree needs to be busted (though I found these 15 companies that the U.S. government tried to break up as monopolies).

Can you?

I mean, the Bay recently broke itself up and people are perplexed. 👇

Toronto Star @TorontoStar

Hudson’s Bay is splitting in two and customers are confused — will the move save the iconic department store, or hasten its decline? @jacoblorinc has more:

Hudson’s Bay is splitting in two and customers are confused — will the move save the iconic department store, or hasten its decline?From a financial engineering perspective the split makes perfect sense. But retail analysts wonder why the company chose to isolate two parts of a bus...thestar.com

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Fun fact: In 2016 there was a cabinet order that sought to “unwind a transaction deemed injurious to Canada’s national security.” The order was related to the acquisition of Montreal-based ITF Technologies by Hong Kong-based electronics company O-Net.

Instead of asking ourselves whether the Bureau should be able to order the unwinding of previously-approved mergers and under what grounds this could happen, we should be asking whether the Competition Bureau has the tools and the power it would need to conclude that a company needs to be broken up in the first place.

I would say that they don’t. In our paper for McGill’s Centre for Media, Technology & Democracy from earlier this year, “The State of Competition Policy in Canada,” Robin Shaban and I outline a few reasons why Canada’s current competition policy framework may not be up to the task of addressing competitive problems in the intangible economy (let alone the tangible one), such as:

insufficient and declining funding;
seemingly arbitrary notification thresholds for merger reviews;
the inability to conduct market studies to track trends in the sector;
a comparatively weak mandate and;
a lack of a recent review.

Currently, the Bureau can only compel businesses to disclose information during the course of an investigation, and the information they are entitled to is limited to the scope of the investigation. To enhance the Bureau’s ability to enforce the Competition Act in the digital sphere, it should be given the same power to do in-depth market studies with businesses’ own information. Canada’s Competition Bureau needs more of a toolkit. If Canadian authorities could conduct a market study, businesses would be compelled to co-operate and provide information that illuminates market trends that are potentially anti-competitive.

I had hoped to see a little more on competition policy in the federal Liberal platform, which mentions “competition” in 3x, the other two of which are related to international trade. Here’s what I have on my mood board:

We will move forward on legislation that will implement the Digital Charter, strengthen privacy protections for consumers, and provide a clear set of rules that ensure fair competition in the online marketplace.

I’m also surprised that the NDP haven’t seized the opportunity for competition reform. There are some important policy opportunities related to labour, many of which were recently outlined in a paper published by the Canadian Centre for Policy Alternatives.

The CCPA @ccpa

A new paper by @RobinShaban (@HelloVivic) and Ana Qarri makes the case for improving Canada’s Competition Act. As it stands, current competition law is “riddled with gaps that permit corporations to form monopolies that can exploit consumers and workers.”

Check and balanceCanada’s competition law, the Competition Act, is supposed to keep corporate power in check and protect consumers and businesses from its abuse. However, this paper outlines how the law is weak and inbuff.ly

Instead of brash posturing on break ups, we should be more thoughtful about the opportunity to review, refresh, and modernize our legislative regime in a digital context. Would it not be better to properly and proactively scrutinize mergers?

At the same time, we also need better policing and guardianship of the Canadian economy. That will mean continued and “vigorous” enforcement. But furiously enforcing old rules with weak tools isn’t helpful. It’s what lets stuff like this happen (more on that soon). The competition debate is as essential as it is abstract.

So, yeah - if there’s anything we should break up, it’s the current competition regime.

Palantir and the World Food Program recently partnered to help transform global humanitarian delivery. What could go wrong with such a collab?

I learned a lot about Palantir reading, “Predict and Surveil,” by Dr. Sarah Brayne. I’ll be speaking to her and Dr. Akwasi Owusu-Bempah this Friday with the Toronto Public Library. The event is free and open to all, and I’d love for you to bring your ideas and comments. 👇

Toronto Public Library @torontolibrary

Author and scholar @Sarah_Brayne discusses her book, Predict and Surveil: Data, Discretion, and the Future of Policing, in conversation with @AOBempah and host @VassB. Tune in LIVE Sep 10 at 12 pm crowdcast.io/e/tplbrayne

Sarah Brayne, the book cover of Predict and Surveil, and Dr. Akwasi Owusu-Bempah.

Vass Bednar is the Executive Director of McMaster University’s new Master of Public Policy in Digital Society Program.

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