Matthew Boswell
Commissioner of Competition
National Arts Centre, Ottawa ON
September 16, 2024
Good morning, everyone, and thank you for joining us today for Canada's Competition Summit 2024! It's truly a pleasure to be here with you all today.
A lot has changed since last year's Summit: AI has gone even more mainstream.
It's no longer a niche topic. AI, and related technologies, are present in many parts of our lives, our work, and across sectors of the economy.
AI has many potential uses. It brings opportunities to improve productivity and innovation.
But it also comes with risks to competition and consumers.
People are increasingly aware of these risks - not just in Canada, but everywhere.
The Edelman Trust Barometer is a survey that measures trust in 28 countries, including Canada. Last November, people from around the world were asked how they felt about AI as an innovation:
- 35% expressed hesitancy or resistance.
- And 59% believed that government regulators lack adequate understanding of emerging technologies to effectively regulate them. [1]
This means that globally, competition regulators face a double whammy: the rapid expansion and adoption of AI, and the perception that we "just don't get it".
That's why competition authorities need to be at the forefront of AI.
At the Competition Bureau, that's what we are striving for.
As Canada's competition watchdog, we're always looking at how new technologies, like AI, are changing our economic reality. This helps us promote and protect competition, even as the technology evolves.
A lot has changed for us at the Bureau since last year's Summit.
On the legislative front, Canada now has stronger competition laws in both digital and traditional markets.
The federal government made historic amendments to Canada's competition laws. These changes will allow for stronger enforcement actions against anti-competitive mergers, abuses of market power, price-fixing cartels and deceptive marketing.
It's a major win for Canada's economy. Study after study has shown that competition stimulates innovation, productivity and economic performance. Everyone benefits from competitive markets, including in AI.
All levels of government in Canada must prioritize competition. The conversations that we had at last year's Summit about a whole-of-government approach to competition ring true more than ever today.
On the operational front, we're investing in the right skills and tools.
We're growing our Digital Enforcement and Intelligence Branch, which was launched in 2021 to modernize our approach to competition law enforcement. The Branch includes a data and analytics team, design thinking practitioners, technology analysts, behavioural economists and intelligence analysts.
And on the collaborative front, we're leveraging a new intra-governmental partnership, and working more closely than ever with competition agencies across the globe.
After lunch today, you'll hear about the Canadian Digital Regulators Forum.
It was established last June as a partnership with the Office of the Privacy Commissioner and the Canadian Radio-television and Telecommunications Commission. In the Forum's first year, we selected AI as our theme, focusing on understanding the technology and how it may affect our work. Many of the concerns around AI cut across our mandates.
I'm looking forward to sitting down this afternoon with my Forum counterparts - including the Copyright Board, who have recently joined the group - to share some of our insights.
But right now, I'd like to share something else: the feedback from our AI consultation.
Led by the Digital Enforcement and Intelligence Branch, we published a consultation paper on AI and competition last March.
We weren't looking to predict outcomes. Rather, we wanted to start a conversation about how competition is developing in AI markets, and what role the Bureau can play.
We received 28 submissions from a range of perspectives, including policy-makers, lawyers, industry and academia.
I'd like to highlight four of the submissions' key themes to kick off the discussions today.
The first theme that we heard across many submissions was the impacts of AI on small and medium-sized businesses.
Some submissions were optimistic that AI could help level the playing field, allowing smaller businesses to better compete. AI could also help businesses overcome financial constraints by automating and optimizing processes.
On the other hand, we heard concerns that smaller firms may have a harder time accessing the data, the technology and the talent needed for AI development. This is especially true in markets where huge technology firms have existing infrastructure and access to large quantities of data.
When a handful of tech giants hold so much control, competition is at risk.
The second theme we heard relates to policy and legislation.
Submissions emphasized that AI is a major driver of innovation. And they highlighted that to foster AI innovation in Canada, we need both competition AND good legislation. The submissions also highlighted a need for transparency in AI systems. AI systems are often a black box - we don't know how they make their decisions. Transparency would allow us to see into this black box and understand how these systems work.
The third theme is that AI markets are unique.
The submissions pointed out that AI markets aren't like other digital markets. Partnerships and investments are more common in the AI world. Marginal costs are higher. AI can apply to an especially wide range of sectors. Those are just three examples of what make these markets unique. So regulators need to better understand what makes AI markets tick. Today's Summit is a good step forward in building that understanding.
And, finally, the fourth theme is concern about the potential uses of AI - namely:
- algorithmic pricing - this is when companies use data to train their algorithms to maximize profits by charging the highest possible accepted price;
- algorithmic collusion - where companies fix prices through algorithms; and lastly
- deepfakes - which are digitally altered or created voices, images or videos made to deceive consumers.
The submissions made one thing clear: AI brings tremendous opportunities, but also serious risks to consumers and competition. These risks are what competition agencies need to guard against.
We're grateful to everyone who participated in our AI consultation. We're preparing a report summarizing what we heard, to be published by the end of this year. We hope that the findings will inform discussions on AI and competition not just here in Canada, but around the world.
With all that said, we have a jam-packed agenda with some world-class speakers from Canada and abroad joining us today. So let's get to it!
It's my pleasure to welcome Joel Blit, Professor of Economics at the University of Waterloo and Senior Fellow at the Centre for International Governance Innovation, who is going to start us off with an overview of AI and its impact on the economy. Welcome Professor Blit!
[1] 2024 Edelman Trust Barometer Global Report
