Canada: Competition Bureau seeks comments on the effects of artificial intelligence on competition

In brief:

The Canadian Competition Bureau (referred to as the “Bureau”) has initiated a substantial endeavor to investigate the ramifications of artificial intelligence (AI) on competition within Canada. On March 20, 2024, the Bureau released a discussion paper titled “Artificial Intelligence and Competition” (referred to as the “Discussion Paper”) and has invited feedback from the public. The Bureau aims to gain a deeper understanding of how AI influences competition in Canada and seeks to devise strategies to effectively address potential competitive challenges stemming from AI while simultaneously fostering competition in AI markets. The outcome of this consultation holds significant implications for both AI developers and users. Submissions are requested to be submitted by May 4, 2024.

Here are the main points from the Discussion Paper released by the Competition Bureau of Canada:

  • AI is significantly impacting various sectors of the economy, with Canadian businesses and consumers increasingly adopting AI technologies.
  • The Bureau issued the Discussion Paper to initiate a national dialogue and deepen its understanding of how competition is evolving in AI markets, aiming to enforce and promote competition effectively.
  • The paper provides a comprehensive definition of AI and discusses the different technologies involved, as well as the markets for AI infrastructure, development, and deployment.
  • It explores how AI may affect competition in areas such as mergers, monopolistic practices, cartels, and deceptive marketing practices.
  • Concerning mergers and monopolistic practices, the Bureau identifies barriers to entry in AI development markets, economies of scale and scope, and potential predatory, exclusionary, and discriminatory conduct.
  • The Discussion Paper also highlights the risks associated with cartels, including the use of AI to facilitate cartel behavior and the emergence of tacit algorithmic collusion.
  • In terms of deceptive marketing practices, the Bureau raises concerns about the scalability of fraudulent activities enabled by AI, such as deceptive telemarketing and the creation of convincing deepfake content.
  • The Bureau seeks feedback on these issues and other related topics, including additional technologies to consider, the characteristics of AI markets in Canada, and factors influencing competition in the AI sector.