UK digital competition review: Forget money, UK should consider 'balance of harms' during tech mergers

www.theregister.co.uk | 3/13/2019 | Staff
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A competition review into the giant digital platforms commissioned by the UK's Chancellor of the Exchequer, Philip Hammond, has recommended a new watchdog and greater data rights for users.

Data portability is one of the strongest recommendations of the Digital Competition Expert Panel, which was headed by the chief economic advisor to former US president Barack Obama, Professor Jason Furman. The team was given the job of examining competition in a "winner takes all" network effects, where large players emerge who then dominate the terms of trade for both consumers and the supply chain.

Review - Digital - Markets - Unit - Action

The review also recommended a new Digital Markets Unit should be established to take rapid action on complaints.

"Over the last 10 years, the five largest firms have made over 400 acquisitions globally. None has been blocked and very few have had conditions attached to approval, in the UK or elsewhere, or even been scrutinised by competition authorities," the panel notes.

Example - Amazon - Power - Terms - Vendors

For example Amazon's oligopsonistic power allows it to set strict terms for third-party vendors. This week Amazon promised to remove "most favoured nation" clauses from third-party suppliers in the United States which obliged the vendors to guarantee Amazon had the lowest price.

The decision of regulators to permit Facebook's acquisitions of Instagram and WhatsApp – approved at the time because neither firm had any real revenue – is now criticised by politicians who want a more proactive approach to mergers. A "balance of harms" should be considered when a large tech company seeks to buy...
(Excerpt) Read more at: www.theregister.co.uk
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