Key Take-Aways

• The Bureau recently hosted Canada's Competition Summit 2024: Market Dynamics in the AI Era and published Report on Summit 2024: Competition in the AI Era identifying key take-aways.
• Canadian regulators are looking to align Canada's AI strategy domestically and internationally through initiatives like the Canadian Digital Regulators Forum and the G7 Competition Authorities and Policymakers' Summit, and to develop best practices. There are no signs that cooperation on responsible AI development and use, including Canada's involvement in international forums, will slow down.
• The Bureau has stated that it is committed to protecting Canadian consumers from AI and AI tools that facilitate misleading advertising and fraud.

In depth

Summit Report AI Highlights

The Bureau hosted Canada's Competition Summit 2024: Market Dynamics in the AI Era (the "Summit") on September 16, 2024. The Summit featured regulators, industry experts and academics to discuss how AI may reshape competitive dynamics in the economy, drive innovation and democratize markets, and the need for vigilance to prevent anticompetitive behaviour. The Summit showcased Canadian and global perspectives, with the Commissioner of Competition (the "Commissioner") delivering opening remarks, Federal Trade Commission Chair Lina Khan delivering the keynote address, and participation from foreign competition authorities.

The Commissioner's opening remarks highlighted how AI is now mainstream and no longer a niche topic, and confirmed that the Bureau is striving to be at the forefront of AI to take advantage of its opportunities while seeking to protect Canadians and the economy from its risks. Reflecting on the Bureau's recent AI initiatives, the Commissioner identified the following themes from submissions to the Bureau's recent consultation on its Discussion Paper: Artificial intelligence and competition which was issued in March 2024: 

• optimism and concerns around AI's impact on small and medium-sized businesses;
• the need for competition and appropriate legislation to foster AI innovation in Canada;
• notable differences of AI markets' from other digital markets, such as increased partnerships and investments, higher marginal costs and AI's applicability to a wide range of sectors; and
• concerns around the potential misuse of AI to, for example, foster algorithmic pricing, collusion and deepfakes. 

For a summary of the Bureau's discussion paper and insights for businesses on its thinking in this area, read our client alert here.

At the Summit, panelists from Canadian universities and regulators, strategic advisory firms, AI non-profits, and international competition authorities examined a variety of issues at the interface of AI and competition. For example, the explosion of AI technologies has prompted competition authorities internationally to launch consultations and studies to better understand its implications and whether current competition regulatory frameworks are flexible enough to address new AI-related challenges.

The Bureau recently published its key take-aways from the Summit in its Report on Summit 2024: Competition in the AI Era, reflecting the perspectives of speakers and participants and the Bureau's own observations:

• AI is impacting competition across sectors of the economy, presenting both opportunities and risks. The double-edged sword of AI includes its potential to create a level playing field for small businesses to compete, enhance productivity and innovation, while also creating the potential to entrench incumbents, facilitate algorithmic collusion and create deepfakes harming Canadian consumers.
• Canadian and international regulatory frameworks must adapt to address AI's unique challenges. Speakers advocated for regulatory agility responsive to the dynamic evolution of AI technologies, which requires cross-sector collaboration by regulators.
• International cooperation is crucial for effective regulation and enforcement in AI-driven markets. Cooperation across forums and initiatives like the Organisation for Economic Co-operation and Development (OCED), the International Competition Network, joint statements and bilateral agreements should include aligning policies, and sharing best practices and insights to ensure effective enforcement in AI markets.
• AI systems must be transparent to ensure accountability and consumer trust. Consumers may be harmed by the "black box" nature of AI system operations which produce conclusions and decisions without giving consumers access to explanations on how the decisions were made.
• The role of "Big Tech" in AI's development is contentious. Some speakers expressed concern about large companies' potential to dominate markets and stifle competition. Others underscored the ability of large firms to drive AI innovation through resources, expertise and partnerships with start-ups.

The Bureau has also participated in several other initiatives and forums related to AI throughout 2024. The Bureau's annual Fraud Prevention Month campaign in March 2024 focused on the new and growing misuse of AI to defraud consumers. The Canadian Digital Regulators Forum – an intragovernmental partnership between the Bureau, the Canadian Radio-television and Telecommunications Commission, the Office of the Privacy Commissioner of Canada, and the Copyright Board of Canada established in 2023 to collaborate regarding digital markets and platforms – hosted an AI Speaker Series featuring presentations from academics and industry experts. Finally, in October 2024, the Commissioner attended the G7 Competition Authorities and Policymakers' Summit, which examined cross-border concerns around the intersection of AI and competition, including AI's rapid uptake and the growth of AI markets, and committed to advancing global cooperation and coordination for responsible AI development and use.

These developments underscore the growing importance of AI to competition and how regulators' understanding of its emerging impact will be central to regulatory policy and future decisions. This remains an area to watch closely as it continues to evolve.