Rethinking Canada’s Competition Policy in the Digital Economy explores the global response to big tech’s oversized reach on people’s lives

TORONTO, March 1, 2023 – As Canada starts reforming its competition policy, a new report out of York University says Canadians should not only be worried about the dominance of big tech and the lack of competition, but the privacy of their personal data as well.

“Personal data has become an important asset in our growing digital economies with a small number of large digital firms, or big tech, increasingly controlling more of it. It can be used to develop new products, target us with advertising, and as a generator of future economic benefit,” says Professor Kean Birch, director of York's new Institute for Technoscience and Society (ITS).

Birch is the author of ITS's first report published today, Rethinking Canada’s Competition Policy in the Digital Economy, with University of Ottawa Doctoral Candidate ‘Damola Adediji. The report is also being submitted to Canada’s competition policy reform review.

“The dominance of big tech firms, underpinned by their mass collection and use of our personal data, is an especially critical issue,” says Birch of York's Faculty of Environmental and Urban Change and graduate program in Science and Technology Studies. “It gives these companies a huge competitive advantage in digital markets and when developing new algorithmic or artificial intelligence products and services.”

Controlling large data holdings creates “network effects” for large digital firms and reinforces their dominance in digital ecosystems. While this might help make their products or platforms more useful to consumers, it also works to their advantage by increasingly attracting more customers and users. “Big tech firms are able to lock-in customers. This makes it increasingly difficult for new start-ups or smaller competitors to compete and to innovate,” says Birch.

The upshot is the dominance of big tech can lower competition leading to higher prices for consumers or other firms, such as advertisers and developers, but it can also have a range of direct and indirect societal harms, like the stifling of innovation.

Canadians are also concerned about rising internet and cell phone prices, as well as rising subscription fees to streaming services, such as Netflix.

Competition policies should promote fairness in consumer pricing, efficiency in production, and innovation in technological and other developments through the requirement that firms do not collude with one another or exert undue pressure on the markets in which they operate. Canadians are not alone in their concerns around competition policy, declining competition and increased market concentration.

The Rethinking Canada’s Competition Policy in the Digital Economy report is an analysis of international competition policy investigations, proposals and reforms – in English – covering various countries, jurisdictions and institutions around the globe. The goal is to learn from their experiences updating their competition policies to help Canadian policymakers reform Canada’s Competition Act, first introduced in 1985 with the last major amendment in 2009. Like Canada, many countries are looking to introduce new competition policies to deal with big tech’s hold on market power.

“Competition policy has become an increasingly important political and public issue in the last few years, not only in Canada, but around the world. There is increasing concern about the growth of monopolies and market concentration across the economy, but especially resulting from the rise of large digital technology firms which provide much of the digital infrastructure we now rely on to live our lives,” says Birch, whose research looks at how everything from an individual’s personality to knowledge and personal data are being turned into assets by big digital technology firms.

“Canada’s current competition policy doesn’t properly address many of the social, political and economic impacts and problems emerging from the digital economy, and in particular the mass collection of personal data.”

About York’s Institute for Technoscience and Society

The goal of the Institute is to build a global hub of critical and interdisciplinary research and knowledge mobilization on the relationship between technoscience and society, especially the configuration of social power underpinning scientific claims, medical practices, emerging technologies, and sites of innovation.

York has one of the largest concentrations of internationally renowned experts working on these important societal issues to promote socially responsible and inclusive technoscience. A major aim is to engage with non-academic stakeholders through publishing of policy reports and policy briefings about member research.