8/28/2023 0 Comments Toolkit cma contact numberAnti-monopolists see confronting concentrations of corporate power as being essential to promoting the interests of working people. Leading competition authorities around the world, including Australia, Germany, the EU and the UK, are moving in a similar direction, signalling the end of a decades-long toleration of rising market consolidation. US regulators have since made vigorous use of their tools, including blocking several high-profile takeovers and launching historic investigations into abusive conduct by ‘Big Tech’. Biden also appointed leading anti-monopolists such as Lina Khan and Jonathan Kanter to key antitrust posts. In July 2021, the Biden administration in the USA decisively and explicitly repudiated the outdated paradigm, and enacted an Executive Order on competition mandating a whole-of-government approach to anti-monopoly. Not only did this thinking lead to waves of harmful consolidation, it also has meant competition authorities lacked the theoretical framework to tackle rising corporate concentration, especially in the digital economy. But in the 1980s, a small group of pro-monopoly scholars began to claim that concentration actually benefits individuals as “consumers” by empowering corporate managers to drive down costs, and hence prices. Traditionally, competition policy aimed to protect the interest of the individual as citizen, taxpayer, worker, and entrepreneur, and of the public as a whole. Internationally, competition policy (or “antitrust” in the US) is now entering a period of rapid flux. A significant body of evidence for the US now points to the role of concentrated markets in facilitating rising profits and driving inflation– and the latest UK studies suggest a similar connection. The IPPR Commission on Economic Justice highlighted the concentrated nature of key sectors of the British economy and the need to reform markets for openness and dynamism. As a recent IFS study noted, “almost all of the US trends are present in the British data,” with high productivity among relatively few ‘superstar firms’ often happening at the expense of many smaller firms caught in their gravitational pull, harming economy-wide productivity overall. But studies by regulator the Competition and Markets Authority show that the UK is suffering too and growing worse. (2022), ‘Firms and inequality’, IFS Deaton Review of Inequalities.Īmong affluent countries, the US has long been seen as the most afflicted by excessive concentrations of market power, with harm to productivity, stagnant real wages (especially for lower-income workers), rising markups of prices over costs, a falling share of labour in GDP and declining business dynamism. There is no road to prosperity that runs through concentrated markets.įigure 1: For decades British firms have been steadily increasing price mark-ups Competition policy is the foundation of an economy built on the creativity, investment, and innovation of the private sector. Dominant firms like to claim that robust competition policy and enforcement mean the UK is “closed for business” - but the opposite is true. It is smart electoral politics, and it can appeal across the political spectrum, and across the regions and devolved nations of the UK. If employed effectively, it can contribute to growth and prosperity, resilience, opportunity, security, diversity, fairness, sustainability, innovation, keeping inflation under control, freedom of expression, or good working conditions. Smart competition policy is a genuinely pro-business agenda that prioritises ordinary working people. As such, it lies at the heart of reform for a fairer economy, any serious industrial policy, and can be “ a master narrative for democracy”. George Dibb, Head of the Centre for Economic Justice, IPPR Barry Lynn, Director, Open Markets Institute Max von Thun, Europe Director, Open Markets Institute Nicholas Shaxson, Balanced Economy Project.Ĭompetition policy can be one of the government’s most powerful policy toolkits, because it directly regulates the structure and operations of our markets and economy.
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