The Competition Bureau (the “Bureau”) recently published a discussion paper exploring considerations for how artificial intelligence (“AI”) and competition in Canada. Along with this paper, the Bureau is seeking feedback on AI’s role in competition from those who have expertise or experience with AI markets and technologies. Feedback can be submitted to the Bureau until May 4, 2024 and all submissions will be published to the Bureau’s website unless the provider requests confidentiality.
In particular, the Bureau’s consultation focuses on the evolution of competition within AI markets, strategies for safeguarding and promoting competition within the AI sector, and measures to address potential competitive harms stemming from AI technologies. In its discussion paper, the Bureau invites discussion and public contribution around factors that can affect competition in the AI sector, aspects of the AI sector that are relevant to competition factors, possible issues that would be particularly significant to the Canadian AI sector, and relevant market studies about the AI sector.
The Bureau’s discussion paper addresses at a high level topics such as barriers to entering into AI markets, product differentiation using AI and its effects on price competition, economies of scale, network effects, predatory strategies, considerations for mergers, cartels, tacit collusion, deceptive marketing practices, and competition promotion. The Bureau posits that policymakers should consider the following when developing pro-competitive policies for AI markets:
- Lower barriers to entry: Make policies technology-neutral or device agnostic to avoid unintentionally prohibiting certain business model. Promote entry and expansion by improving access to key inputs such as data, computing, expertise, and capital.
- Allow businesses to feely set the price, quality, and quantity of products and services: Avoid making policies that unnecessarily restrict or inhibit open-source business models.
- Give business strong incentive to compete: Ensure that standards do not result in or facilitate coordination by requiring market participants to share competitively sensitive information.
- Allow consumers to easily switch between competitive alternatives: Promote interoperability and data portability in policies to promote competition and consumer choice.
AI has rapidly evolved and is affecting many sectors of the Canadian economy. The Competition Bureau is calling for feedback on AI and competition in Canada as part of its ongoing work to better understand the AI sector, to predict impacts on competition, and to address potential competitive harm within AI markets.
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