Freeland says today’s big tech firms are like the monopolies of a century ago

Freeland says today’s big tech firms are like the monopolies of a century ago

OTTAWA—Global Affairs Minister Chrystia Freeland says the current period of technology-driven economic disruption has “eerie” similarities to the rise of monopolies and the super elite a century ago — and may require Canada to take similarly drastic steps to address the situation.

Asked about the power of tech giants and growing wage disparity between CEOs and workers, Freeland said there are “important” parallels with the “trustbusting era” of the 1900s, when massive corporations and monopolies were broken up by governments.

“You had a technology revolution then, you had globalization then, you had a tremendous amount of innovation, tremendous wealth being created, but you also had the rise of the super elite and a lot of people being hollowed out,” Freeland said on Tuesday.

The good news, Freeland said, is that Western societies “figured it out” by creating social safety nets and coming up with ways to share wealth more widely.

“The bad news is before we figured it out, we had to live through the First World War, the Second World War, the Great Depression and the Bolshevik Revolution,” Freeland said.

U.S. Senator Elizabeth Warren, a candidate for the Democratic presidential nomination, is pushing for strict regulations to break up companies including Facebook, Google, Amazon and Apple. According to the New York Times, Warren told a crowd in Long Island City on March 8 that those companies “think they can roll over everyone.”

Two weeks later, the Democrat that chairs the House’s antitrust committee, David Cicilline, called on the Federal Trade Commission to investigate Facebook.

“There is … mounting evidence of anticompetitive conduct by Facebook that may warrant scrutiny by federal antitrust enforcers,” Cicilline, a congressman from Rhode Island, wrote in the Times.

“For example, the social media goliath has reportedly systematically spied on its rivals, giving it valuable information on how people used competitive products.”

While the idea appears to be gaining momentum south of the border, at least in Democratic circles, there’s been almost no discussion of a similar course of action being taken in Canada — even as the Liberal government looks to create new regulations for social media platforms and internet companies.

The Competition Act — Canada’s antitrust law — allows a tribunal to examine companies’ practices and prohibit anti-competitive behaviour, including the “abuse of dominance” in a market.

“There’s nothing wrong with becoming big. There’s nothing wrong with doing really, really well and achieving high market share. But if you abuse it and engage in abusive tactics (that) are primarily meant to harm your competitor, that’s when the law can step in,” said lawyer Oliver Borgers, a senior partner at McCarthy Tétrault’s competition and foreign investment group.

“What we don’t have as a framework today is that if you’re just big, and we just think it’d be better if we broke you up into smaller pieces? There are no laws on the books that allow that.”

But if the Competition Bureau thinks a company has abused its strong market position, Borgers added, “they can seek fines and orders for the abuse to stop.”

Whatever regulations for social media and tech giants the Liberal government lands on, there’s little time for this Parliament to debate — let alone pass — new legislation, with just six scheduled sitting weeks left before the summer break and the coming election.

But the government will have an opportunity to provide greater clarity on their thinking at the end of the month, when the International Grand Committee on Disinformation and “Fake News” holds its hearings in Ottawa.

The committee — which includes representatives from nine parliaments, including Canada, France, and the U.K. — was created after the U.K. Parliament’s investigation into Facebook’s Cambridge Analytica scandal, and is continuing to study how governments can hold digital platforms to account.

Alex Boutilier is an Ottawa-based reporter covering national politics. Follow him on Twitter: @alexboutilier

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