Canadians should take pride in the careful and courageous leadership of Canadaâs Competition Bureau. Commissioner Matthew Boswell hasnât shied away from addressing the countryâs most complex challenges amid an official review of the Competition Act. He tackled telecom in the historic challenge of the Rogers-Shaw merger, and the Bureau just released their much-awaited market study into the retail grocery market. His starry eyes may be set on addressing the reduced competition of the countryâs newspaper industry. The question is just how high he is willing to aim.Â
While addressing Canadaâs marketplace for news isnât new for the Bureau, itâs (unfortunately!) unrealistic to think that a singular merger review will reinstate a more robust marketplace for news. In January of 2021, the Bureau closed its four-years long investigation into allegations that Postmedia and Torstar reached an agreement. Many saw this conclusion as a failure. Journalist-turned-scholar Marc Edge suggested that the âCompetition Bureau is dominated by economists who may lack sufficient grounding in media issues to effectively deal with mergers and takeovers in news industries.â Yikes.Â
While the country has yet to explicitly commit to emulating the successful all-of-government approach in President Bidenâs Executive Order on Promoting Competition, the Heritage Canadaâs Online News Act (C-18) is a legislative intervention designed to support better competition in the news industry that falls far outside of the Competition Act. Truly, the state has been toying with how to best protect independent journalism for some time now. A Canadian Heritage Committee report in 2017 (Disruption: Change and Churning in Canadaâs Media Landscape) suggested a change to the Competition Act to more effectively deal with news media mergers and takeovers. The proposal advocated for a new section of the legislation that could require a panel of experts in media to do a âdiversity of voicesâ test to ensure there is no dominance in any media market. The imaginative suggestion was not adopted.Â
It is old news by now that traditional news media has suffered as digital platforms revolutionised where people consumed the news (often through social media) and how (often for free). This incrementally reduced readership to difficult-to-sustain levels. Advertising revenue similarly shifted to being distributed and overseen by online platforms, further impoverishing newspapers.Â
Worth noting that the Government of Canadaâs advertising spend similarly favours digital media over traditional media. Last year, the government spent four times as much on digital media than print advertising. Earlier this year, news publishers told the Competition Bureau to end Googleâs digital ad dominance to âprevent and prohibit companies from acting anti-competitively as both buyers and sellers in digital advertising markets.â
But our Bureau is not currently in the business of changing the financialization models of the internet giants - yet. Matt Stoller has written that Google is stealing from Canadian newspapers and advertisers. Earlier this month, the EU charged Google with violating antitrust laws by using its dominance in online advertising to undercut rivals. And the US is considering breaking up Googleâs digital ad business.Â
A merging of Postmedia and the Toronto Star could certainly be problematic for a myriad of reasons. But the business practices that have made that merger inevitable are becoming inescapable.Â
This is a long way of saying that while the Competition Bureau is not responsible for the collapse of the sector, people seem to be looking to the institution as a potential saviour. It may not be realistic to appeal to the regulator as a potential hero should the prospective merger proceed given the realities that have already revolutionised the countryâs news media. In fact, the aspiration may be entirely quixotic as the potential merger could be justified under a âfailing firmâ defence. Such a defence is permitted in rare cases where the expected deterioration in the competitive environment would have happened regardless of the merger. A merger between the Toronto Star and Postmedia may simply be a hail mary pass ahead of bankruptcy.Â
The painful and much-memed fact that Canada âneeds more competitionâ has become as part of the countryâs heritage as maple syrup or hockey skates. Whatâs new is one manâs dogged determination to make sure we actually get it, regardless of the stakes. How Boswell approaches this next fight will redefine his legacy: will he seek to soothe the public and assuage political concerns by reviewing the merger if it goes forward using an outmoded piece of legislation from the 80s, or will he look to address structural inequity and weirdness upstream? Given that his term is set to conclude in 2024, he has nothing to lose by doing both.Â