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Popular Media When Facebook and its other services disappeared from the internet on Monday night, it seemed to confirm many people’s worst fears about the company. The . . .
When Facebook and its other services disappeared from the internet on Monday night, it seemed to confirm many people’s worst fears about the company. The outage, some said, demonstrated how indispensable Facebook had made itself to our lives – and hence, they argued, how important it was to regulate it or break it up.
Read the full piece here.
Popular Media Mergers and acquisitions in tech have come under intense scrutiny in recent years. Some fear that Big Tech companies like Google and Facebook have been . . .
Mergers and acquisitions in tech have come under intense scrutiny in recent years. Some fear that Big Tech companies like Google and Facebook have been able to protect their market positions by acquiring smaller would-be competitors and stifling competition as a result.
Scholarship A joint publication of ICLE and The Entrepreneurs Network makes the case that the U.K. government's plan to crack down on Big Tech mergers would harm the British start-up ecosystem.
The British government is consulting on whether to lower the burden of proof needed by the Competition and Markets Authority (CMA) to block mergers and acquisitions involving large tech companies that have been deemed as having strategic market status (SMS) in some activity. This is likely to include companies like Google and Facebook, but the scope may grow over time.
Under the current regime, the CMA uses a two-step process. At Phase 1, the CMA assesses whether or not a deal has a ‘realistic prospect of a substantial lessening of competition’. If so, the merger is referred to Phase 2, where it is assessed in depth by an independent panel, and remedied or blocked if it is deemed to carry a greater than 50 per cent chance of substantially lessening competition.
The reforms proposed by the government would stop any deal involving a SMS firm that creates a ‘realistic prospect’ of reducing competition. This has been defined by courts as being a ‘greater than fanciful’ chance.
In practice, this could amount to a de facto ban on acquisitions by Big Tech firms in the UK, and any others designated as having strategic market status.
Mergers and acquisitions are normally good or neutral for competition, and there is little evidence that the bulk of SMS firms’ mergers have harmed competition.
Although the static benefits of mergers are widely acknowledged, the dynamic benefits are less well-understood. We highlight four key ways in which mergers and acquisitions can enhance competition by increasing dynamic efficiency:
Acquisition is a key route to exit for entrepreneurs
Acquisitions enable a ‘market for corporate control’
Acquisitions can reduce transaction costs between complementary products
Acquisitions can support inter-platform competition
The UK risks becoming a global outlier
The Government’s theories of harm caused by tech mergers are under-evidenced, hard to action, and do not require a change in the burden of proof to be effectively incorporated into the CMA’s merger review process.
The Government should instead consider a more moderate approach that retains the balance of probabilities approach, but that attempts to drive competition by supporting startups and entrepreneurs, and gives the CMA the tools it needs to do the best job it can within the existing burden of proof.
Read the full white paper here.
Popular Media Congressional Republicans face a dilemma in determining how they want to approach Big Tech. Some perceive the largest tech companies to have too much power . . .
Congressional Republicans face a dilemma in determining how they want to approach Big Tech. Some perceive the largest tech companies to have too much power over political speech, power that can be used to censor conservatives. Many fear that so-called “woke” opinions are artificially promoted by tech companies whose employees agree with them, while news stories that contradict that narrative are downplayed.
Popular Media Try listing every problem the Western world has at the moment. Along with Covid, you might include slow growth, climate change, poor health, financial instability, . . .
Try listing every problem the Western world has at the moment. Along with Covid, you might include slow growth, climate change, poor health, financial instability, economic inequality, and falling fertility. These longer-term trends contribute to a sense of malaise that many of us feel about the Western world. They may seem loosely related, but there is one big thing that makes them all worse. That thing is a shortage of housing: too few homes being built where people want to live. And if we fix those shortages, we will help to solve many of the other, seemingly unrelated problems that we face as well.
Popular Media Last week gave us a picture of things to come in Britain. First, the Government raised National Insurance contributions by 2.5%. This was ostensibly to pay . . .
Last week gave us a picture of things to come in Britain. First, the Government raised National Insurance contributions by 2.5%. This was ostensibly to pay for “social care”, but the money will mostly go to the NHS, with social care’s problems left largely unaddressed. Then, on Saturday, The Times reported that the Government will abandon many of its plans for planning reform, under pressure from Tory backbenchers and voters.
TOTM The American Choice and Innovation Online Act (previously called the Platform Anti-Monopoly Act), introduced earlier this summer by U.S. Rep. David Cicilline (D-R.I.), would significantly change the nature . . .
The American Choice and Innovation Online Act (previously called the Platform Anti-Monopoly Act), introduced earlier this summer by U.S. Rep. David Cicilline (D-R.I.), would significantly change the nature of digital platforms and, with them, the internet itself. Taken together, the bill’s provisions would turn platforms into passive intermediaries, undermining many of the features that make them valuable to consumers. This seems likely to remain the case even after potential revisions intended to minimize the bill’s unintended consequences.
Popular Media The government has opened a consultation on new plans to regulate Big Tech. But the proposals it is considering may end up hurting British startups . . .
The government has opened a consultation on new plans to regulate Big Tech. But the proposals it is considering may end up hurting British startups and entrepreneurs unintentionally.
Presentations & Interviews Earlier this year, the International Center for Law & Economics (ICLE) hosted a conference with the Oxford Union on the themes of innovation, competition, and . . .
Earlier this year, the International Center for Law & Economics (ICLE) hosted a conference with the Oxford Union on the themes of innovation, competition, and economic growth with some of our favorite scholars. Though attendance at the event itself was reserved for Oxford Union members, videos from that day are now available for everyone to watch.
https://youtu.be/uB6txjzmEj0
Charles Goodhart, of Goodhart’s Law fame, and Manoj Pradhan discussed the relationship between demographics and growth, and argued that an aging global population could mean higher inflation and interest rates sooner than many imagine.
Catherine Tucker of the Massachusetts Institute of Technology discussed the costs and benefits of privacy regulation with ICLE’s Sam Bowman, and considered whether we face a trade-off between privacy and innovation online and in the fight against COVID-19.
https://youtu.be/bP_Ca6SPLMM
Qualcomm’s General Counsel Don Rosenberg, formerly of Apple and IBM, discussed the political and economic challenges facing a global tech company in 2021, as well as dealing with China while working in one of the most strategically vital industries in the world.
https://youtu.be/5jq5Vj3sjN0
David Teece explained the dynamic capabilities framework, a way of understanding business strategy and behavior in an uncertain world.
https://youtu.be/3yyQWbndksQ
Nobel laureate Vernon Smith discussed the enduring insights of Adam Smith with the Mercatus Center’s Shruti Rajagopalan.
https://youtu.be/6B4k4e8qzmc
The final panel, with the Information Technology and Innovation Foundation’s President Robert Atkinson, the Australian Strategic Policy Institute’s Samantha Hoffman, and the American Action Forum’s Jennifer Huddleston, discussed the role that tech policy in the U.S. and China plays in the geopolitics of the 2020s.