Discover more from regs to riches
🇨🇦 Rewriting the rules of the modern economy
powered by Shopify (?) 💭
🌞 This is a quick follow up piece from our Toronto Star op-ed that came out over the weekend.
In Sunday's Toronto Star, we argued that Shopify has an opportunity to up its (already laudable) social responsibility game to model a better version of big tech. But Shopify can't be expected to redefine big tech on its own. Canada's governments also have a critical role to play. 🇨🇦
July’s “Big Tech” congressional hearing in the US sounded a wakeup call for both regulators and the dominant tech companies that have grown more or less unchecked over the past two decades. And just last week, the US’ House Committee on the Judiciary considered Proposals to Strengthen the Antitrust Laws and Restore Competition Online. It made us wonder when Canada might follow suit - if at all.
This call should inspire regulators in Canada with a new sense of urgency to address our own out-dated regulatory frameworks.
Alongside intentions to better capture value from technology companies through taxation, the Government of Canada should speed up its efforts to address growing global concerns about big tech, including through the modernization of antitrust and competition policy – particularly given that market consolidation could move faster in the context of the COVID-19 pandemic – advancing decent work legislation, and clearer policies on the use of data. These aspects of accountability were notably absent from last week’s Speech from the Throne. Now is the time to consider how we want homegrown tech companies to scale, not during a future antitrust investigation or commissions of inquiry.
The Competition Bureau's recent investigation into Amazon highlights that the issues plaguing the tech giant globally are also relevant here at home. But whether or not this investigation finds that Amazon is abusing its market dominance, it should underline the need for a proactive review of the policy frameworks governing tech companies in Canada.
Governments also have a key role to play in incentivizing and requiring higher standards of social and environmental responsibility.
– in particular where public funding or partnerships are directly contributing to a company’s success. As governments enter into new partnerships and provide significant subsidies to Canada’s businesses in service of a swift economic recovery, they should consider opportunities to strategically maximize the public return on these investments. This could include, for example: requiring public reports on employee and client diversity, or on the removal of content that contravenes company codes of conduct, requiring commitments to decent work and employee training, and incentivising new models for increased transparency, oversight, or participation of workers and clients in company decisions.
Governments could also consider enabling regulation – for example, to make it easier for tech companies (and other companies) to twin profit with social purpose via new incorporation structures.
Rewriting the rules of our modern economy
The instinct to do business differently is not alien to Shopify. Their Global Economic Impact Report describes their “purpose driven approach” that is “rewriting the rules of our modern economy” and outlines how their affordable, accessible commerce tools are providing a launchpad for businesses of all sizes and from all places to succeed, democratizing technology, fostering competition, and turning commerce into a “force for good.”
These aspirations resonate with the commitments made last year by the US Business Roundtable - of which Apple and Amazon are members - redefining the role of the corporation to include delivering value to consumers, investing in employees through fair compensation, benefits and training and by upholding the values of diversity and inclusion, treating suppliers fairly and ethically, supporting communities, protecting the environment, and delivering long-term value to shareholders.
But while treating Shopify as a valued partner, the Canadian government should not rely on them to self-govern. Permissionless innovation is a critical mistake that American authorities made with Facebook, Amazon, Google, and other tech firms that outgrew existing regulations and overawed policymakers.
Governments in Canada have a profound opportunity to learn from warning signals south of the border – to inform a proactive approach to designing regulatory frameworks and business models that both align with business interests and work for the Canadian economy and society as a whole.
As Shopify pushes the boundary of responsible innovation, this kind of forward-looking regulatory clarity could help to de-risk Shopify’s growth path.
🙋 when is Shopify’s platform a #monopoly?
What is bad for competition could be ~pretty rad~ for the Canadian economy. How will policymakers and academics respond to this probability?
There was a free online conference on Friday re: Big Tech. For every argument you hear re: how to regulate “Big Tech,” think about whether and why we’d apply it to Shopify. I’m currently chewing on this - stay tuned. 👇
💅 Sarah Doyle’s experience and passion for public policy led her to the Brookfield Institute for Innovation + Entrepreneurship (BII+E), where she is the Director of Policy + Research. In this role, Sarah leads the development of the Institute’s research agenda and oversees the work of the Institute’s policy team.
🤓Vass Bednar is a smart generalist working at the intersection of technology and public policy.