Beware Ex Ante Regulation: Introducing “Cut and Paste” Ex Ante Regulations in Canada Against Select Big Tech Companies is Just Bad Economic and Legislative Policy

This paper examines the international and Canadian debate around ex ante regulations for Big Tech platform companies. The paper explores the need for and costs associated with ex ante regulation and concludes that pursuing such regulations in Canada would be ill-advised. While some argue that ex ante regulation is necessary to prevent market failure and protect incentives for innovation, this paper contends that no empirical evidence has been offered with respect to actual market failure. The paper provides a brief overview of international policy developments aimed at addressing vertical issues stemming from the network effects and scale economies in concentrated digital platform markets. These include the European Union’s Digital Markets Act, the United Kingdom’s Digital Code of Conduct, the United States’ American Innovation and Choice Online Act, and the G7’s Digital Policy. In addition, it examines recent Canadian competition policy developments, focusing on calls for ex ante regulation of Big Tech platform companies. The paper argues that the expressed goals of ex ante regulation are often amorphous and that there are significant costs associated with its implementation, as well as potential legal hurdles in the Canadian context. Moreover, the current ex post enforcement framework of the Competition Act, with some tweaking, is capable of protecting the competitive process in Canada. In light of these factors, pursuing ex ante regulations in Canada w