The Man Who Sued Google

When Algorithms Set the Price: The Future of Consumer Deception

Many of us see supposed discounts every day – products in flyers or on websites where the “regular” price is crossed out and replaced by a supposed sale price: a vacuum that is normally $599 is now $499, or a pair of pants that usually sells for $99, now only $49! Sometimes the deals are legitimate, but often they’re fake discounts meant to mislead consumers into thinking they’re getting a bargain. These fake discounts aren’t just marketing gimmicks, they’re illegal – running afoul of Canada’s “ordinary selling price” laws, which require listed regular prices to be legitimate. Products must genuinely be sold at the regular price for either a certain length of time or a specified volume of overall sales. The laws are meant to protect consumers from deceptive advertising and to keep merchants honest, but they’re routinely violated because the practice works. Psychological studies show that the promise of a bargain, real or not, makes people more likely to buy what’s being offered. The practice is already difficult enough for enforcers to detect and stop, so what happens when algorithms and artificial intelligence are added to the equation? What constitutes an “ordinary selling price” and a discount when dynamic pricing means costs for products and services can change every few seconds? These are questions raised in a new paper by Matthew Chiasson, a senior policy advisor for the Competition Bureau, who believes it’s the first attempt to address the issue in an academic context. Chiasson previously appeared on the Do Not Pass Go podcast to discuss how large companies were weaponizing regulations to stifle competition. He joins us again to talk about what’s a real discount in a world where the price of everything is increasingly fluid. Check out his paper here [https://papers.ssrn.com/sol3/papers.cfm?abstract_id=6689561]. Do Not Pass Go is a reader-supported publication. To receive new posts and support my work, consider becoming paid subscriber. Get full access to Do Not Pass Go at www.donotpassgo.ca/subscribe [https://www.donotpassgo.ca/subscribe?utm_medium=podcast&utm_campaign=CTA_4]

The Bread Price-Fixing Scandal is Far From Over

Payouts in the class-action lawsuit against Loblaw for its role in the Great Canadian Bread Price-Fixing Scandal are now going out, which is great news… but also not. The $49.11 deposits, being paid out to those who registered for the lawsuit, are a drop in the bucket compared to what the scandal has cumulatively cost Canadian households – and a reminder of the big competitive problems plaguing the industry. For 15 years, Loblaw and its fellow large grocers – including Metro, Sobeys, Walmart and Giant Tiger – conspired to raise the price of bread. While Loblaw is finally paying something for its role in the cartel, the public is in the dark as to what – if anything – is happening with the other participants. Worse still, what little is known about the scandal suggests that price-fixing on other products may be happening and the chains themselves haven’t changed their behaviour, if the string of continuing controversies is anything to go by. Keldon Bester, executive director of the Canadian Anti-Monopoly Project, says strong action is needed by all levels of government to shed more light on the various ways in which the nation’s large grocers are colluding and preventing competition in the sector. He joins Do Not Pass Go this week to discuss why the current payouts are good news for consumers, but also to explain why Canada’s approach to fixing the industry’s structural problems isn’t even half-baked. Check out the Canadian Anti-Monopoly Project here [https://antimonopoly.ca/]. Do Not Pass Go is a reader-supported publication. To receive new posts and support my work, consider becoming a paid subscriber. Get full access to Do Not Pass Go at www.donotpassgo.ca/subscribe [https://www.donotpassgo.ca/subscribe?utm_medium=podcast&utm_campaign=CTA_4]

Inside the Elevator Oligopoly Reshaping Canadian Cities

Canada has some of the most expensive elevators in the world — and as a result, we have far fewer of them per capita than most countries in the world. It’s a symptom of a much larger problem involving regulation, competition, housing affordability and Canada’s relationship with the United States. The two countries have effectively isolated themselves from the global elevator market by maintaining their own unique technical standards. While most of the world follows European regulations, North America requires different testing, sizing and certification rules that make it harder for international competitors to enter the market. The result is a highly concentrated industry dominated by four big multinational firms, where elevators cost far more to install, maintain and modernize than they do in Europe or Asia. As Canada becomes more urbanized and relies increasingly on condos and apartment buildings, these added construction costs are rippling through the housing market. Worse still, two members of the Big Four – Finland’s Kone and Germany’s TK Elevator – are now set to merge in a $34 billion (U.S.) deal that will create the largest manufacturer in the world and tighten the oligopoly even further. Stephen Smith is the executive director of the Center for Building North America, a research group that studies elevator markets around the world. He joins Do Not Pass Go to discuss how Canada needs to detach itself from U.S. standards and move closer to Europe in order to address the housing crisis and open its market to players outside of the oligopoly. Smith’s Globe and Mail piece, referenced in this episode, is here [https://www.theglobeandmail.com/opinion/article-canadas-outdated-elevator-rules-are-adding-to-the-housing-crisis/], while his recent report on the global elevator market is here [https://centerforbuilding.org/publication/elevators]. Do Not Pass Go is a reader-supported publication. To receive new posts and support my work, consider becoming a paid subscriber. Get full access to Do Not Pass Go at www.donotpassgo.ca/subscribe [https://www.donotpassgo.ca/subscribe?utm_medium=podcast&utm_campaign=CTA_4]

The Hidden Real Estate Tactic Driving Up Grocery Prices

Industry concentration, supply problems and the war in Iran are all contributing to ever-escalating grocery prices for Canadians, but there’s also a serious anti-competitive issue behind them: restrictive real-estate covenants. These secretive real-estate deals, signed by Loblaws, Sobeys and others when they open stores, are keeping competitors away and funnelling consumers toward existing stores. They’re prevalent across Canada and, in some cases, their terms are egregious – would you believe that Loblaw’s typically blocks billiard halls from malls? Once used to prevent specific minorities from living in certain areas, grocery chains have discovered and deployed these restrictive covenants to great effect, which why is the Competition Bureau is now investigating them and Manitoba has banned them. Jacob Filipp, a marketing professional in Toronto, began unearthing and tracking these contracts after discovering how they drive up grocery prices. He maintains a definitive and growing database on his website [https://jacobfilipp.com/covenants/] as something of a hobby and a public service. He joins Do Not Pass Go this week to explain restrictive covenants and how grocery chains are using them to drive up prices for Canadians. Do Not Pass Go is a reader-supported publication. To receive new posts and support my work, consider becoming a paid subscriber. Get full access to Do Not Pass Go at www.donotpassgo.ca/subscribe [https://www.donotpassgo.ca/subscribe?utm_medium=podcast&utm_campaign=CTA_4]

The Competition Act Turns 40: What Canada Has Right – and Wrong

Fun fact: Canada once led the world in fighting monopolies. With the Anti-Combines Act of 1889, we became the first country in the world to enact pro-competition laws, designed to bust monopolies and protect consumers. But, as the saying goes, being first doesn’t always mean being best. The Competition Act, which took effect on June 19, 1986, was an attempt to fix the problems with its predecessor. It’s been revised several times since. As the Act turns 40, we’re joined by its chief architect, Lawson Hunter, to assess how it has evolved and performed, and where Canada’s competition policy and enforcement should head next. Hunter’s career is long and distinguished. A former competition commissioner and assistant deputy industry minister, he is the recipient of the Chambers Canada Lifetime Achievement Award for his work as a member of the bar and a member of the Order of Canada. He’s the former chief corporate officer for Bell Canada and, as a long-time counsel at Stikeman Elliott, has advised many of Canada’s biggest companies on mergers and acquisitions. On this week’s Do Not Pass Go podcast, we discuss the up-and-down enforcement of the Act, who should be the next Competition Commissioner, and how Canada has been “infected” by all these antitrust hipsters. Do Not Pass Go is a reader-supported publication. To receive new posts and support my work, consider becoming a paid subscriber. Get full access to Do Not Pass Go at www.donotpassgo.ca/subscribe [https://www.donotpassgo.ca/subscribe?utm_medium=podcast&utm_campaign=CTA_4]