(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

City commissions another fire hall roof study

Fernie City Council has authorized staff to reallocate the existing budget from… Continue reading

Pride Festival just around the corner

The Fernie and Elk Valley Pride Festival is just around the corner,… Continue reading

Kootenay Learning Campus opens in Fernie

School District 5 celebrated the grand opening and ribbon cutting of the… Continue reading

Diamond of the Elk Valley turns 30

Island Lake Lodge, located only 14 km from Fernie, is celebrating its 30th anniversary this year.

Kootenay-Columbia incumbent MP responds to Trudeau brownface scandal

Stetski proud of NDP leader Singh’s reaction, which focused on people not power

VIDEO: ‘Thrones,’ ‘Fleabag’ top Emmys

Billy Porter makes history as first openly gay black man to win best drama-series acting Emmy

Fernie Fire Department celebrates FireSmart education

“The greatest safety is a neighbourhood that is FireSmart,” said Alan Westhaver.

Trails in Fernie’s Ridgemont area reopen

Fernie Trails Alliance urging trail users to abide by and obey closures still in place

B.C. court hears disclosure arguments in Meng Wanzhou case

Huawei exec argues she was unlawfully detained at YVR last December at direction of U.S. authorities

Trudeau attacks Scheer, Harper, Ford in first federal salvo for Ontario

Liberal leader targets three big conservative rivals in second full week of campaign

B.C. Lions hype-man marks 15 years of cheers

Crazy P cheers, chants, bangs his drum and spreads a message of love

PHOTOS: Steller sea lion with plastic around neck rescued on Vancouver Island

Rescue staff determined the plastic band cut the protected animal’s neck approximately two inches

B.C. VIEWS: School officials join fact-free ‘climate strike’

Students, public get distorted picture of greenhouse gases

Most Read