(Pexels)

Watchdog looks into anti-competition practices in the digital economy

Work will touch on online search, social media, display advertising and online marketplaces

Canada’s competition watchdog wants information on what companies in the digital economy may be doing to harm competition as part of a ramp up in scrutiny on the practices of digital behemoths.

“Since certain digital markets tend towards a ‘winner takes all’ outcome, firms in these markets have a strong incentive to adopt strategies that increase the likelihood the market tips in their favour, and stays that way,” said the Competition Bureau in a paper explaining the public consultation Wednesday.

Businesses and other interested parties “likely to have valuable information on competition” in core digital markets can share it confidentially, the Competition Bureau said in a statement, adding companies doing business in these markets, industry associations and venture capital firms may be well positioned to do so.

The bureau is looking for information on strategies firms may use to hinder competition in some core digital markets, like online search, social media, display advertising and online marketplaces.

The move comes as it examines concerns that these markets have become increasingly concentrated, hurting consumers and businesses, it said in the paper.

If this is the case, the bureau wants to know if it is because digital markets may favour a single victorious firm over a number of smaller successes. This process is called tipping and tends to happen when the company benefits from having a widely used product, like a social media platform that an individual’s friends and family also frequent. It also depends on economies of scale, as well as access to large amounts of data.

The other possible explanation, the bureau said, could be because current market leaders did not outperform their competitors, but succeeded by stifling competition.

Anti-competitive strategies would likely be geared at protecting a core market or capturing adjacent markets. Such strategies could include refusing to deal with competitors, prohibiting suppliers from providing rivals with better prices or terms, or buying out rivals.

“If not addressed in a timely fashion, such strategies — which effectively prevent competition on the merits — are likely to make it that much more difficult for new firms to successfully compete in the market,” the bureau, which acknowledges the two explanations may be complementary, said.

The bureau will keep information provided to it confidential and should be submitted by November 30 via an online form on its website or to an email address.

The information could be used to inform potential investigations or help it develop guidance for companies participating in the digital economy.

The news comes on the heels of a July report from the bureau’s Australian counterpart, which made several recommendations after examining the impact of online search engines, social media and digital content aggregators on competition in the media and advertising services markets.

Meanwhile the European Commission announced that same month that it opened a formal antitrust investigation into Amazon. It is looking “to assess whether Amazon’s use of sensitive data from independent retailers who sell on its marketplace is in breach of EU competition rules.”

Also in July, the U.S. Department of Justice opened an antitrust investigation into “whether and how market-leading online platforms have achieved market power and are engaging in practices that have reduced competition, stifled innovation, or otherwise harmed consumers.”

ALSO READ: Facebook cracks down on groups spreading harmful information

The Canadian Press


Like us on Facebook and follow us on Twitter.

Just Posted

Caps improve to 3-0

Lynn and Arquiett score two each as Caps double up Chiefs

Carving in Cowichan provided road to recovery for stroke victim

“I didn’t know if I’d be able to get out of bed or walk, let alone carve”

Sarah Simpson Column: Use your smarts to slow down early holidays

It’s Friday the 13th. There’s a full moon. A rabid bat is… Continue reading

Island pair helps BC to baseball title

Cowichan’s Ella Duncan-Reda and Oak Bay’s Tess Sawkins integral to provincial success

VIDEO: Vancouver Island mayor details emergency response after fatal bus crash

Sharie Minions says she is ‘appalled’ by condition of road where bus crashed

UVic president offers condolences after two students killed in bus crash

‘We also grieve with those closest to these members of our campus community,’ Cassels says

Coming Home: B.C. fire chief and disaster dog return from hurricane-ravaged Bahamas

The pair spent roughly one week on Great Abaco Island assisting in relief efforts

Newcomer Ferland lines up with sniper Pettersson as Vancouver Canucks camp opens

Ferland provides more depth and a scoring threat up front, Pettersson says

Intelligence official charged seemed to be ‘exemplar of discretion’: UBC professor

Professor Paul Evans says he served on Cameron Ortis’s doctoral dissertation committee

B.C. police watchdog to investigate man’s head injury during RCMP arrest

Suspect fled on a bicycle and fell off when an officer attempted to stop him

Nanaimo company gets licence to test psychedelic drugs for therapy treatment

Salvation Botanicals interested in manufacturing, testing and research and development

‘A real shame’: B.C. MLA says factors behind Tolko mill closing should have been caught

Kelowna-Mission MLA Steve Thomson said the industry is in bad shape across the province

VIDEO: Seniors at B.C. assisted living facility shocked by Oct. 1 eviction notice

Building owners terminate lease for McGuire Lake Congregate Living in Salmon Arm

Most Read