National Post: Canada has lagged on policing Big Tech. That may be about to change.

May 11, 2022 Tech

As other countries boldly introduce new accountabilities for Big Tech through the passing of legislation, Canada finds itself rethinking the approach of its online harms bill, defending the utility of its proposed Online News Act, and anticipating long-overdue privacy legislation. In an international context, we remain a cautious laggard that doesn’t seem to be able to get digital policy even close to right.

Unfortunately, pointing out that we have fallen behind does not translate into meaningful action. Furthermore, no singular piece of legislation will be a silver bullet to articulate and defend the optimal role for data in the economy, and the interlocking challenges that digital markets present. Consumer protection, competition concerns, digital privacy and other issues ubiquitous in modern markets now blur and overlap — not easily siloed into specific policy remits.

It is unwise to expect that one single sweeping bill — even something as comprehensive as the European Union’s Digital Markets Act — will comprehensively calibrate the legislative infrastructure that underpins our digital society. Similarly, overdue amendments to the Competition Act alone will not resolve every competition issue that consumers, small businesses and workers face.

However, the stars may be aligning in a surprising and important way that could catapult Canada’s policy approach ahead of peer nations that have taken much stronger and more robust action to address digital competition issues.

The stars may be aligning in a surprising and important way

Opportunities are mounting: Canadians are expecting new federal privacy legislation. Last year, consultations were held on a Modern Copyright Framework for Online Intermediaries and the gig economy, and the province of Ontario recently held consultations on the Consumer Protection Act, which was last updated in 2002. Earlier this year, the government committed to a review of the Competition Act so that the law can be adapted for “today’s digital reality,” and there are proposed amendments to the Competition Act in the Budget Implementation Act, like the addition of consumer privacy as a factor when evaluating anti-competitive behaviour. The Bank Act is also up for review next year.

Strategic policy modernization that maintains an integrated approachand produces a cohesive digital policy environment could be Canada’s consolation prize. The previously promised Digital Task Force that was intended to “position Canada as a leader in the digital economy” should be revived. And ensuring that legislative edits stay true to an overarching and integrated vision, focused on a consumer-centric theory of harm, could be a North Star.

Meeting the complexities of digital economy head-on requires an all-of-government approach that is exemplified by the recent Executive Order on Promoting Competition from the Biden administration. Already, we see promising clues that Canada’s federalist structures are primed to embrace a more diffuse and co-ordinated approach to competition reform. A class-action lawsuit alleging price-fixing among meatpackers was brought forward by a Quebec-based consumer advocacy group and the Ontario Securities Commission has a new mandate that includes “competitive capital markets.” Researchers have pointed to the potential of the provinces to address the power of gig work platforms; Ontario recently banned non-compete clauses to empower worker mobility; and British Columbia’s consumer protection legislation contains crucial distance seller provisions that protect consumers in the age of e-commerce, while the right to repair movement is gaining momentum.

The Competition Bureau has also contributed meaningful ideas, such as requiring certificates of independent bid determination during procurement — an OECD best practice — and making competition assessments a mandatory aspect of any new regulation. The bureau is also beginning to examine how data mobility can support greater competition in the digital age.

As political leaders at all levels of government have urged small businesses to “go digital” in response to the pandemic, they have failed to acknowledge the lurking challenges that may await businesses online. Copycatted products, digital gatekeepers self-preferencing their own products, platforms charging high tolls in the form of advertising fees or sales commissions, competitors employing the use of fake reviews (both positive and negative), and a host of other challenges afflict small and medium-sized businesses in digital markets. Without regulatory support, independent businesses are on the receiving end of whatever terms, fines and market conditions dominant platforms care to set. Companies like Amazon, Alphabet, Apple, Meta (and many others) are now the private regulators of online markets.

Government decision-makers are long overdue to address the implications of new data-driven behaviours that impede competition. It is time to modernize our legislative tools to address the anti-competitive behaviour that flourishes online. Until we thoroughly modernize all relevant legislative tools, the largest private actors will continue to set the rules and norms for digital markets in the vacuum of effective legislation and enforcement. Markets are public institutions shaped by socially and democratically determined rules of engagement. When we abdicate the crucial responsibility of rule-making away from democratic process in favour of cautious inertia, the largest and most powerful companies write the rules in their favour. As it stands, the largest technology companies are getting public subsidies while imposing private taxes.

Companies like Amazon … are now the private regulators of online markets

Stakeholders like C.D. Howe’s Competition Policy Council have protested that the Competition Act is not a policy instrument that can or should be used to achieve broader policy goals beyond promoting economic efficiency. This narrow interpretation ignores the necessity of aligning policy infrastructure around a broader vision of the economy. Canadians don’t only care about low prices and efficient markets, they care that their rights as consumers and workers, their privacy, the future growth prospects and the democratic infrastructure of this nation are upheld and strengthened.

Piecemeal policy interventions won’t undergird this vision; we can do better than tinkering with a Competition Act drafted in 1986 or simply layering on new legislation. We need to properly acknowledge that digital markets are rife with the accumulation of personal data, surveillance, unequal terms for independent businesses and suppliers, and harms to workers. A concurrent regulatory approach to competition and the digital economy that lessens the burden on the bureau to identify cases is a smarter approach.

We need a strategic all-of-government approach to ensure that Canada’s laws reflect our evolving digital world. Canada seems to be uniquely on the cusp of concurrent policy review that proxies the kind of comprehensive rethinking our contemporary economy demands. We can seize the moment or politely let it pass us by.