New tools, stiffer penalties needed to police big tech companies, says competition watchdog

The federal government should boost the penalties for anti-competitive behaviour to more effectively regulate tech giants and the digital economy, says Canada's competition watchdog.

Competition regulators around the world should work together to deal with tech giants, says Matthew Boswell

Canada needs tougher penalties for anti-competitive behaviour to adapt to a borderless digital economy, Commissioner of Competition Matthew Boswell said Thursday. (Adrian Wyld/THE CANADIAN PRESS)

The federal government should boost the penalties for anti-competitive behaviour to more effectively regulate tech giants and the digital economy, says Canada's competition watchdog.

"The maximum penalties for anti-competitive behaviour are, quite simply, not high enough in Canada, meaning we lack the teeth necessary to deter anti-competitive behaviour and promote compliance," Commissioner of Competition Matthew Boswell told an Ottawa forum on data and the digital economy Thursday.

Boswell's comments come as calls have been multiplying in the U.S. for the government to take anti-trust action to split up tech companies like Facebook because they have become too powerful.

Earlier this week, elected officials from a dozen countries were in Ottawa to grill representatives of some of the biggest tech giants on everything from their efforts to fight hate speech and harmful content on the internet to their business practices.

Trust issues

In an interview with CBC News, Boswell said his office has been getting complaints and launching investigations related to the digital economy.

"On the consumer side, we have seen lots of problems in terms of trust in the digital economy," he said. "We have pursued cases against multiple large corporations for false or misleading representations online.

"We have an ongoing case against Ticketmaster in terms of online pricing representations and we just resolved a case against Hudson's Bay for price representations, many of which were made online."

Boswell told the forum that Canada's competition law is "generally up to the task" of dealing with big data. However, he said, his office needs new tools to more effectively regulate the digital economy.

Boswell said his office lacks the power to conduct market studies, including the information-gathering abilities found in most developed jurisdictions. Canada is also the only major economy to have an "efficiencies defence" in competition cases "which can allow mergers that potentially hamper competition and which, some say, is particularly ill suited for the digital economy," he said.

Boswell said the federal Competition Bureau also has to improve the technology it uses to handle evidence needed to police the digital economy. The bureau's ongoing investigation of bread price-fixing by grocery stores has gathered 100 terabytes of data, requiring specialized tools to analyze and review the records.

To help deal with the challenges, the bureau has created a new position of chief digital enforcement officer to help position the bureau as one of the world's leading competition regulators in the digital economy, Boswell said.

Among the issues the bureau will be examining is whether data acts as a barrier, preventing other players from entering the marketplace.

Boswell said the bureau is also going to be more vigilant about monitoring the acquisition of small firms by big tech companies — particularly transactions that could affect competition. Flanked on the forum panel by representatives of competition regulators from the U.S. and the European Union, Boswell said laws have to change to allow competition regulators to be able to quickly obtain evidence located in other countries.

Sharing information over borders

"Because of jurisdictional issues and access to evidence, we need to think about new ways to share information and to share information very quickly across borders, in the public interest in multiple jurisdictions," he said. "We can no longer tolerate a world in which it takes months, if not years, for us to obtain information that is not situated in Canada but that's very relevant to conduct going on in Canada."

Boswell said countries have to work together to deal with the challenges of tech giants and the digital economy.

"The rapid rise of the borderless digital economy is a truly global phenomenon, which requires competition authorities to collaborate and cooperate on an almost daily basis. I believe that the best way to look at global conduct that may cause concern is by taking a globally-coordinated approach to enforcement."

Elizabeth Thompson can be reached at elizabeth.thompson@cbc.ca


Elizabeth Thompson

Senior reporter

Award-winning reporter Elizabeth Thompson covers Parliament Hill. A veteran of the Montreal Gazette, Sun Media and iPolitics, she currently works with the CBC's Ottawa bureau, specializing in investigative reporting and data journalism. She can be reached at: elizabeth.thompson@cbc.ca.


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