Whether it’s because of its domination of online retail, its tax-evading strategies, or its founder’s wealth, Amazon has been under constant fire in the past few years from political commentators, consumers, and the media.
In August, the Canadian Competition Bureau launched an investigation into Amazon for activity potentially impacting competition to the detriment of consumers and businesses in the Canadian market. The investigation is timely, with Amazon receiving criticism for capitalizing on its position during the COVID-19 pandemic, and for its participation in the recent U.S. antitrust hearing, which included some of the largest tech firms.
Canadian competition laws seek to maintain competition within Canadian markets in order to maintain a variety of benefits, such as lower prices for consumers and better product and service offerings. The Bureau’s investigation is civil in nature and is being conducted under the Competition Act’s restrictive trade provisions, with a focus on abuse of dominance. If evidence of civil misconduct is found, the Bureau has the ability to fine Amazon $10 million for the first instance, and $15 million for subsequent instances. Among other considerations, the Bureau is looking for any past or present company policies that may impact the willingness of third-party sellers to sell their products at lower prices on other retail channels, such as their own websites. At this time, there is no conclusion of wrongdoing.
Amazon is cooperating with the Bureau and is maintaining its efforts to support Canadian businesses: “We are cooperating with the Competition Bureau’s review and continue to work hard to support small and medium-sized businesses who sell in our Canadian store—and help them grow.”
Interestingly, Conservative MP Michelle Rempel Garner introduced a motion to question Amazon on the allegations during a meeting with the Standing Committee on Industry, Science and Technology, but was blocked from doing so by a Liberal member of the committee, despite unanimous support from the NDP. The Conservative party has stressed the importance of the matter: “This is a non-partisan issue which could be impacting small business owners in Canada. I encourage the Liberals to support this motion, which we expect to pass with the support of the Opposition members on the committee.”
The investigation is of much interest to the public, not only because of Amazon’s strong presence in Canada and across the world, but also because of constant criticism of CEO and Chairperson Jeff Bezos’ personal wealth. Bezos is worth an estimated US$193.5 billion – by far the largest personal net worth in the world. Through his 54 million shares of Amazon, Bezos owns a total of 11.2% of the company. Interestingly, Bezos’ tremendous wealth is a direct consequence of Amazon’s rising share price (which now sits at 3,294.62 USD per share), which in turn is a consequence of investors buying Amazon’s stock. With so little of Bezos’ wealth coming from a salary paid by Amazon, it begs the question of how Bezos can rid himself of his wealth without giving away control of the company that he founded. Regardless, the Bureau’s investigation should signal to Canadians that competition laws play a significant role in Canada’s business environment.
