Breaking Up is Hard To Do


In this month’s Open Markets newsletter:

  • Has Facebook hired Nick Clegg too late to save them? As pressure in the US Congress grows and as Elizabeth Warren makes breaking up the tech titans a central part of her nomination campaign, would it be better for Facebook to demerge at its own pace and on its own terms rather than waiting for break-up to be imposed on it?
  • “Monopsony” may finally be gaining traction. It seems likely that the tech companies deliberately lowered pay in their sector by agreeing not to poach each others’ staff. Short video on the issue is here.
  • In the wake of the blocked Siemens-Alsthom merger, a Franco-German industrial policy manifesto calls for EU Member States to be allowed to overturn EU level competition decisions. They argue that if forces cannot be allowed to unite, Europe cannot compete with China and the US. We have previously argued that this approach might represent a return to the failed industrial policies of the past.
  • The UK has started to take tech dominance seriously. The Digital Competition Expert Panel led by Jason Furman agreed that the dominance of the big tech companies was having a stifling effect on competition. It suggests a new Digital Markets Unit which will police a new code of conduct. Some are skeptical whether this will work.
  • Britain’s post-Brexit weakness was once again highlighted in the same report that argued that the UK will simply not have the clout, post-Brexit, to take action alone against the digital giants.
  • As 30 million Americans are subject to non-compete clauses, calls for banning them are growing in the US.

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