The logo and trading information for Live Nation Entertainment is displayed on a screen on the floor at the New York Stock Exchange in New York on May 3, 2019.Brendan McDermid/Reuters
Fourteen years ago, the United States government approved the merger of promoter Live Nation and Ticketmaster. It was yet another questionable corporate marriage permitted in an era that first and foremost believed in the maxim bigger is better and that put the interests of corporations ahead of the public.
That era emerged in the 1980s – but it is now decisively concluded.
Last week, the U.S. brought Live Nation and Ticketmaster to court, accusing them of “monopolistic control” over live events such as concerts and seeking to reverse the decision of 2010 by breaking the companies apart. “Fans pay more in fees, artists have fewer opportunities to play concerts, smaller promoters get squeezed out, and venues have fewer real choices for ticketing services,” alleged U.S. Attorney-General Merrick Garland.
At the same time, the Department of Justice and the Federal Trade Commission in the U.S. are taking on the biggest technology companies in the country (and the world) – Apple, Google, Amazon and Meta – on allegations of wielding monopoly power to illegally undermine competition.
These are American cases but the results will likely reverberate beyond the U.S., in two distinct ways. First, should the U.S. government be successful in one or more of its cases against Live Nation and the rest, the decisions will reshape how those companies operate globally. Second, the revival of competition law, and the bipartisan political support behind it, will – indeed, already has – influence the approach of legislators and regulators elsewhere, starting with Canada.
There’s no comparable blockbuster case in Canada in which Ottawa is seeking to break up a large company. But the emergence of a bolstered and emboldened Competition Bureau is taking shape this year.
Over the past several years, this space has chronicled and advocated for changes to Canada’s outdated competition law, one rooted in an era – the 1980s – that favoured mergers rather than approaching them with a skeptical eye.
Proposed reforms have become law – such as last December when there was unanimous support on Parliament Hill for amendments that significantly strengthened the Competition Act. “The changes are a breakthrough,” this space declared. “The next step is to put the tools to work and change the culture.”
In late April, the Competition Bureau said its focus is “leveraging the new tools in its toolbox as it takes enforcement action and promotes competition.”
The Bureau is moving on multiple fronts, including a proposed study of the airline industry and a Federal Court case seeking detailed information from the parent companies of grocers Loblaws and Sobeys.
The grocery case, reported by Canadian Press last week, revolves around what are called “property controls”: real estate agreements that may prevent potential rivals from setting up shop near an existing grocer. The Bureau alleges such agreements are being used to stifle competition, something it had warned of last year.
In Federal Court filings, the head of the Competition Bureau alleges there is “reason to believe” that Empire Co. and George Weston “intended to shield” themselves from “the emergence of increased competition.” George Weston said it is co-operating; Empire argued the Bureau’s push is “invalid or unlawful.”
What’s changed – politically and legally – is key wording in the Competition Act. Take note of the Bureau’s use of the word “intended” in Federal Court. In the old Competition Act that favoured large companies, the bar for the Bureau to prove anti-competitive behaviour was unduly high.
Section 78, under abuse of a dominant position, was expanded in mid-2022. An anti-competitive act is now broadly defined as any that’s “intended to have a … negative effect on a competitor, or to have an adverse effect on competition.”
In the changes passed unanimously by the House of Commons last December, the overly high bar that detailed the legal test for abuse of dominance was also modified to a more reasonable level.
These are the new tools the Competition Bureau is putting to work. But the culture is also changing. What used to be accepted as standard ways of doing business are now being questioned.
This is the new era in competition law.