Those calling for changes to Canada’s Competition Act should be wary that the consequences might be worse than any benefits. Read on.
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There is growing concern that “big tech” companies like Google, Apple, Facebook, Amazon and Microsoft have become so large they pose a threat to competition in the digital economy. Those calling for change argue that Canada’s Competition Act must be strengthened to enable the government to regulate these firms’ market dominance.Sign up to receive the daily top stories from the Financial Post, a division of Postmedia Network Inc.
Often a market economy is evaluated against an impossibly high standard — the “perfect competition” described in introductory economics. Because the real economy inevitably falls short of this theoretical ideal, people call on government to step in and repair the deficiencies. But, as in many areas of life, we shouldn’t let the perfect be the enemy of the good.Article content
If industry concentration is too high, activists say, government should break up the dominant business, limit its acquisitions or force it to provide data to competitors in order to level the playing field. That all sounds very reasonable, maybe evenreasonable, but its unintended consequences could involve destroying the innovation and productivity that are key to Canadians’ standard of living.
The most troubling aspect of proposed changes to the Competition Act is their possible negative impact on productivity. The OECD already forecasts Canada will have the
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Opinion: Don't let Competition Act changes suffocate innovation, productivityThose calling for changes to Canada’s Competition Act should be wary that the consequences might be worse than any benefits. Read on.
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