Canada's Corporate Concentration

Although I am past the age where I would consider attending a concert (unless James Taylor were performing),  I follow with interest the efforts the Americans are taking to bust the virtual monopoly that Live Nation has over ticket sales and costs. What is especially interesting is the often aggressive stance the U.S. takes when it comes to monopolies and the narrowing of competition, which stands in sharp contrast to Canada's weak mewling sounds over corporate concentration. As I have said before, Justin Trudeau has never met a corporate entity he doesn't adore.

David Olive writes:

In Canada, we complain about corporate concentration but don’t do much about it.

What a contrast that is with the U.S., which filed a landmark anti-monopoly lawsuit last week against Live Nation Entertainment, the world’s biggest concert promoter, and its Ticketmaster subsidiary.

The lawsuit was brought by the antitrust division of U.S. President Joe Biden’s Department of Justice.

It alleges that with control of more than 70 per cent of primary ticket sales at the U.S.’s leading concert venues, Live Nation engages in monopolistic practices at the expense of live-event patrons, artists, promoters and venue owners.

 The U.S. government seeks a breakup of the $22-billion (U.S.) Live Nation (2023 revenues), separating its promotion and ticketing businesses.

The Live Nation lawsuit is part of a Biden antitrust agenda aimed at curbing excess corporate power across the U.S. economy. 

The Americans have also gone after Apple and Amazon and grocery chain mergers; while  Biden's actions may be political in motivation, they stand in sharp contrast to Canada's inaction. Just recently, any concern about competitive pricing 

didn’t stop Ottawa from approving the merger of telecoms Rogers and Shaw.

As well, there is the much vaunted voluntary Canadian Code of Conduct for grocers, which, as I understand it, will not lower prices but 'bring stability."

Canada’s grocery code of conduct is a set of rules and guidelines that seek to improve fair dealings in the industry, especially between big grocers and their suppliers. These suppliers include both farmers, as well as producers of various kinds of processed foods.

In other words, nothing really there for long-suffering Canadian consumers. 

And while there is still corporate concentration in various U.S. sectors,  putting upward pressure on prices, ours is particularly egregious,

with our Big Five banks, Big Three telecoms and grocery chains, and just two major airlines and railways.

 [N]o one would argue that Canada can boast of adequate competition. The lack of it contributes to Canada’s laggard productivity growth.

I expect little to change here at home. Performative politics, or, as I like to call it, political theatre,  has long taken precedence over substantive policy when it comes to taming the corporate beast. The lion continues to roar loudly.

Political Theatre Writ Large

                                      

For those unfamiliar with the death of Chuckles the Clown on the Mary Tyler Show, please click here. The episode ranks as one of the funniest in television history, its dark absurdity eliciting laughter that some would deem inappropriate.

I chose the above as my graphic because I am so often these days thinking of the absurdity of political theatre - you know, the type that happens when government tries to convince the electorate that it is serious about flexing its muscle in the face of corporate power. Such enactments are designed to divert our attention away from the fact that corporations control our governments. 

The theatre currently on offer is called Standing Up To The Tech Giants. The scenario goes like this: the Canadian government, in order to protect our sovereignty and our democracy, is demanding that Meta and Google pay news organizations for the content showcased by their respective algorithms. Thanks to the resistance put up by both entities, the government is pulling ads from Meta and Instagram, which are now refusing to carry Canadian news on their sites; Google will face similar consequences when it stops showcasing Canadian news. Personally, it means nothing to me that those two will no longer be sites where I can find links to news; I read several newspapers, one print and two digital, because I abhor living in ignorance or a restricted worldview. 

Is the Canadian response a blow struck in defence of democracy and sovereignty? Maybe, but our leaders lack any real appetite to tackle the corporations that exert even more influence/control over our lives. One example, of which I have previously written, is the Rogers-Shaw merger. Despite the protracted spectacle of that theatre, the merger was, as I always knew it would be, ultimately granted. The fact that the feds want to protect and cosset such a cellphone quasi-monopoly is reflected in the fact that they refuse to allow foreign competition into the field. 

And what about the toothless Parliamentary inquiry into grocery prices in Canada? You know, the one where executives thumbed their noses at our representatives.

The sorriest part of the Competition Bureau’s just-released market report on grocery competition in Canada is not its obvious conclusion — we need more competition in the sector — but the lack of disclosure reported by the grocery giants.

We recall the parliamentary hearings this past spring when MPs pushed grocery executives for granular financial data on food profits, essential to validating, or disputing, the “greedflation” charge levelled against retailers as grocery prices rose and rose and rose.

And we recall the high degree of corporate pushback from executives appearing before those hearings who declined to air their profit margins, specifically on food, in the public realm.

Now we know that despite promised confidentiality from the Competition Bureau, co-operation from the industry was mixed. To quote the report: “In many instances, the bureau was not able to obtain complete and precise financial data, despite its repeated requests.”

The government's answer is not to create legislation that would compel disclosure, nor will it entertain the NDP's suggestion about taxing grocers' windfall profits. No, its response is that we need more competition. How that can be achieved is not included in the current theatrical run.

The other response is to subsidize the grocers' excessive profits by sending out rebate checks that will do nothing to tame corporate greed but perhaps score a few political points for the governing Liberals. But even that attempt seems to be falling flat:

If you watched the entire clip, you will have noticed the corporate world's best Canadian friend, Justin Trudeau, blaming the high cost of food on the pandemic, the war in Ukraine, etc. Nary a word about corporate greed, that omission exactly what his friends in high places like and encourage.

To draw upon a cliché, the current corporate/government hybrid presiding over us is happy to treat us like mushrooms. Mushrooms are kept in the dark and fed manure. 

Just like the citizens of Canada.

Democracy Is Fine, Until It Isn't

 

I don't post on a daily basis anymore, partly because I have other things keeping me busy and partly because I do wonder if anything good can come from a frequent barrage of my deep-seated cynicism. I see little to inspire hope in the world, so why simply drive home the point again and again?

There are times, however, when what is being reported calls for denunciation, and my anger today emanates from the hypocrisy with which democracy is presented to us. On the one hand we are told that it is sacred, but on the other hand, when it results in things some don't like, they find their own ways of undermining and denouncing it, but in terms that are not so obvious.

Recent episodes come readily to mind.

In an effort to promote more moderate drinking, Ireland has passed legislation that will mandate cancer warnings be placed on all alcohol products sold in the Emerald Isle. While I have doubts about the efficacy of such labelling, I don't dispute the democratic right of a state to make and enforce health policy.

Not everyone agrees.

The United States and other countries have expressed concerns over Ireland’s plans for labels on alcoholic products that would warn of a link to cancer at a World Trade Organisation meeting on Wednesday, officials say.

The item was on the agenda of the Technical Barriers to Trade Committee of the WTO when it met in Geneva, a forum for the organisation’s 164 members to discuss and mediate potential disputes over regulations.

The US, Mexico, and the Dominican Republic raised concerns that Ireland’s new alcohol labelling requirements signed into law in May could present a barrier to trade at the meeting, according to a Geneva-based trade official.

Additional countries also spoke up in the meeting about the issue, some supporting the complaints made by others, including Japan, Colombia, Canada, Chile, Argentina, New Zealand, Cuba, Australia and Guatemala.

Now, on the surface this looks like a trade irritant. But if any thinking person peeks behinde the curtain, they may come to the conclusion that it is the affected corporations that are really calling the shots, and the state is essentially their 'beard'. In other words, the nation-state, as it often has, is doing the bidding of its corporate masters. This will not be a revelation to many, but that it is a fact should outrage all of us.

The Irish situation is reminiscent of something that occurred several years ago pertaining to the WHO's efforts to reduce global use of tobacco. The tobacco company Philip Morris lobbied intensively and extensively to weaken measures aimed at reducing the consumption of their very lucrative product. You can read all about their sordid tactics in the link, but this excerpt might provide a little flavour of what they were up to:

a goal of Philip Morris is to increase the number of delegates at the treaty conventions who are not from health ministries or involved in public health. That’s happening: A Reuters analysis of delegates to the FCTC’s biennial conference shows a rise since the first convention in 2006 in the number of officials from ministries like trade, finance and agriculture for whom tobacco revenues can be a higher priority than health concerns.

A WHO treaty to discourage smoking was successfully implemented, but, at the time of the report,  while the U.S, signed the treaty, it did not ratify it. So much for the freedom to enact democratic and life-saving policies, eh?

We can look closer to home for further illustrations of whose interests are served in our democracy. The Rogers-Shaw merger, despite the protracted political theatre and government hand-wringing over competition in the wireless industry, was, as I knew it would be, endorsed. Who benefits? I think you know the answer. Who suffers? The citizens, of course.

Then there is the federal government's apparent inability to recover billions of dollars in evaded taxes. Despite the revelations of both the Paradise and Panama Papers, the CRA seems strangely reluctant to go after the titans who hold those accounts, Much easier it is to go after small businesses, as evidenced by the fishing expedition the tax agency is going on for Shopify records.

Even closer to home is the absolute contempt Doug Ford and John Tory evinced in the mayoral race which Olivia Chow just won. Both men had vowed to stay out of the election, but neither did, the most egregious violation by Ford, who pronounced absolute catastrophe for the City of Toronto should a "leftie" like Chow be elected. But what else can one expect from someone whose loins are set atingle whenever a privatization plan is mentioned?

"The people are never wrong," goes the cry about democracy. True, unless they want something the people behind the curtain don't. 

So much for the voice of the people.

The Rogers-Shaw Merger - An UpDate

 

For someone who is appalled by the pending approval of the Rogers-Shaw merger (see my previous post), I will take whatever good news there is, no matter how slight.

Here it is:

The Competition Bureau says a Federal Court has issued an emergency stay temporarily suspending the Competition Tribunal’s dismissal of its case against Rogers Communications Inc.’s $26-billion takeover of Shaw Communications Inc.

The federal agency says the suspension will remain in place until its application for a stay and an injunction is heard.

The injunction would block the deal from closing until the Bureau’s full appeal of the decision, rendered on Thursday, is heard.

The Tribunal said in its ruling that the merger was not likely to result in higher prices for wireless customers and that it was satisfied a plan to sell Shaw’s Freedom Mobile to Quebecor Inc.’s Videotron was adequate to ensure competition isn’t substantially reduced.

The Bureau had sought to block the merger and in its appeal argues that the Tribunal acted outside of its jurisdiction in a “rush to judgment.”

If the Tribunal’s decision stands, the merger will only require the approval of federal Industry Minister Francois-Philippe Champagne to go ahead. Champagne said Saturday that he will wait until there is “clarity” in the ongoing legal process before issuing a decision.

The deal was originally scheduled to close by the end of the year, with a possible extension to Jan. 31.

While this is likely simply a small delay in the merger, some opposition is better than none, in my view.

UPDATED:A Love Affair That Hurts All Of Us

 

If you follow such things (i.e., the news) you will know that our current federal government, echoing the passions of previous ones, has an unmitigated and uninterrupted crush on the corporate sector. The only problem with that protracted affair is that the rest of us suffer the consequences.

Examples abound, including the government's failure to achieve any results from the revelations found in both the Panama Papers and the Paradise Papers. But today's post will examine only two recent and egregious demonstrations of our leaders' fealty to their business overlords.

The first is the the holiday disaster widely reported at airports. While undoubtedly much of the chaos is attributable to the weather vagaries imposed by climate change, the corporate contempt for passengers is also there for all to see. And it cannot be more obvious than in the debacle that Sunwing Airlines finds itself in the midst of.

The Canadian government is criticising leisure specialist Sunwing Vacations after an operational meltdown left hundreds of passengers stuck when winter weather disrupted the carrier’s operations earlier this week.

The Toronto-based company, like its US peer Southwest Airlines, has been scrambling to sort through the mess, leaving customers frustrated and angry. Canadian media reports that some of the carrier’s passengers have been waiting to be repatriated from Latin American holiday destinations including Cancun for up to five days.

Hmm, about that government 'criticism'. While I have seen U.S Transportation Secretary Pete Buttigieg at least go on national television to discuss Southwest Airlines' thousands of cancellations, it was only three days ago that our Minister of Transport, Omar Alghabra (or his office) managed these anemic tweets:

Canadians are patient when it comes to weather disruptions but they rightly expect their airlines to keep them informed and to manage these disruptions smoothly. I am very concerned with the current situation with Sunwing Airlines.

 This ongoing situation is unacceptable. Canadians must receive the information they need to return home safely. We expect all airlines to keep their passengers informed when it comes to delivering a service that they were paid to do.

Passengers have rights under the Air Passenger Protection Regulations to ensure robust passenger protection in situations like these, and our government will continue to ensure these rights are protected.

Surely, that will put the fear of God into Sunwing, eh? If you click on the above link, you will see the contempt with which this toothless tweet was met by those who responded to it. 

My second example is the pending merger between Rogers and Shaw, a merger that will obviously result in less competition and higher prices for telecommunication services. At least our Competition Bureau tried to block that merger as against the best interests of Canadians, but that veto was overturned by the Competition Tribunal. As well, it has met the approval of Industry Minister Francois-Phillipe Champagne.

Those opposing it are groups seeking to represent the interests of ordinary Canadians.

Commissioner of Competition, Matthew Boswell, head of the Competition Bureau, said he was “very disappointed” in the decision and is “carefully considering” next steps.

That could include an appeal of the Tribunal’s decision to the Federal Court of Appeal.

 Critics say the Tribunal’s decision was hastily made and follows a troubling pattern in Canada’s failure to foster healthy competition in one the country’s most powerful sectors.

 “Though the decision is disappointing, it is ultimately a product of Canada’s permissive and outdated merger laws,” said Keldon Bester, co-founder of The Canadian Anti-Monopoly Project. “It is … disheartening to see the Tribunal rush such a critical decision for Canadians at the request of the merging parties.”

Matt Hatfield, campaigns director of OpenMedia, said the decision was “the last nail in the coffin of telecom affordability in a dismal 2022.”

The buyout results in higher prices and fewer choices, in an already tight telecom market, he added.

Official 'cover' for the merger is the provisional sale made to Quebecor of Freedom Mobile, an arm of the Shaw empire. It comes with the 'expectation' that it will provide sufficient competition to keep Rogers-Shaw on its toes. We'll soon see how that one works out, but the auguries are not good, especially given that Globealive, a telecommunication entity with many companies, had wanted to buy Freedom Mobile for $3.75 billion, substantially more than the $2.85 billion Quebecor has paid for it. Speculation is that that deal wasn't accepted because it would have meant real competition for the Rogers-Shaw behemoth.

So there you have it. As usual, Canadians are being sacrificed on the altar of big business, the only true god worshipped by our government. One can only hope that Canadians ruefully remember their place in the pews the next time they go to the polls.

UPDATE: Oh, perhaps we can all rest easy now that Industry Minister Francois-Phillipe Champagne has articulated his expectations for Quebecor for its purchase of Freedom Mobile to be allowed:

Videotron would have to agree to keep Freedom’s wireless licences for at least 10 years and the minister would “expect to see’’ wireless prices in Ontario and Western Canada lowered in line with the company’s Quebec offerings.

“What remains before me is the separate request to transfer spectrum licences from Shaw to Quebecor. Promoting competition and affordability in the telecom sector is one of my top priorities. That position has not changed,” Champagne said.

However, there is no word as to why he has not investigated the refusal to sell Freedom Mobile to  Globealive, despite the company offering almost $1 billion more than did Quebecor. (See above discussion.)

But Champagne's statement makes for nice window dressing, doesn't it?