See you here in a event which is outside our normal series because we wanted to create something to take the
opportunity of Professor Jason Furman being in Oxford today to give him an opportunity to share his thoughts with you.
As you know, Jason is not only original thinker, but he's a doer and has been quite instrumental in many domains.
Not pleased with President Obama in the US and more recently in the review of the digital economy for the Secretary of State of Business,
as well as the chancellor in the UK. This combination of interest in ideas being at the forefront of ideas and, uh,
changing things in the real world is, of course, dear to the heart of the Oxford Martin School,
which was created for that purpose and to the programme, which I now direct in the school,
which is on the intersection of technological and economic change.
Jason is the Professor of Practise of Economic Policy at Harvard University at the Kennedy School.
He's a non-resident fellow at the Peterson Institute. And he's also this coming.
You're going to be responsible for introductory economics for Harvard with David Lipson,
who was part of the presidential campaign for President Obama.
And before he became president and then chairman of the Council of Economic Advisers from 2013 to 2017 and for many other duties as well.
Interestingly enough, he not only worked with President Obama,
but he also worked with President Clinton and Aspirin President Gore in his campaign and of course,
with many others that we know well, including Joe Stiglitz at the World Bank.
And then subsequently, he's been director of the Hamilton Project, which is an economic policy research group.
Focussing on the intersection of economic policies and visions of shared growth
has been senior fellow at the Brookings Institution and taught at many,
many universities extremely wide ranging interests, including health economics, tax policy,
technology policy, domestic macro and micro, etc. published many, many articles and books.
And in addition to his Ph.D. from Harvard, has a Masters from LSC and an additional one in public policy from Harvard.
Together with Diane Coyle, who's speaking here on the 66th of June, so in two weeks on Thursday.
And Philip Marsden, who's here? He chaired the review expert panel as it was called on competition in the digital economy and
had a very significant impact that I hope with its 20 recommendations [INAUDIBLE] share with us.
And then I hope it impacts on the UK if those responsible for it are not too distracted by other activities.
Jason, it's a huge pleasure to have you here and welcome you to the stage.
Yeah. This is been live cost of gets a Q&A.
Be aware of that when it happens. I'm grateful.
Ian, thank you for that introduction. Thank you for hosting me here at the Martin School and to have a chance to
really talk through the recommendations that we made for digital competition.
This is something that an expert panel that I chair that includes Philip Marsden, who is here.
I'm Diane Coyle, who is mentioned, also an economist, Amelia Fletcher and a computer scientist named Derek McCauley came up with.
Before I get to our recommendations, I wanted to situate my own personal work in this space with how I came to it.
As Ian said, I have a wide ranging set of interests in economics and in economic policy.
And for me, the single animating question has been why income growth has slowed so much in the advanced economies.
The United States incomes used to grow at three percent a year. Now, incomes grow at about half a percent a year.
That goes from doubling once a generation to taking over a century.
For incomes to double if you look one level further down, you find that this slowdown in income growth is a combination of slower productivity growth,
which started slowing around the 1970s and has been in quite severe slowdown for the last decade.
And also rising and high levels of inequality.
So the combination of the pie growing less quickly and the pie being more unequally divided is what lies behind this.
To me, that was a little bit like a massive crime and put me in almost a paranoid mindset as
I walked around looking for suspects that could possibly have committed that crime.
I eventually gave up looking for any one suspect that committed it, but I came to understand that it was many, many small things that contributed.
And in particular, if you could find anything that potentially played a role in both productivity and in inequality,
that that would be quite important. Joe Stiglitz was celebrating the 50th anniversary of his teaching in two thousand fifteen,
and I decided with a former colleague and friend of mine, Peter Orszag, to do a paper in honour of Joe Stiglitz for that conference.
And what we focussed on was whether there was a link between a lot of the micro issues that Joe was interested in that taught us about that.
I worked some with him in terms of concentration at the micro economic level in the economy.
And then some of the macro themes that had preoccupied Joe like slower growth and especially in his case, rising inequality.
And in this first part of the talk, I'm going to talk about that increased concentration and the analysis.
We had some of the research since then that documents the increase in concentration
throughout the economy and tries to tease out some of the consequences of it.
That'll be a segue way to the expert panel, which is focussed in particular on one sector, the technology sector.
So I'll tell you a little bit about what we were set up to do, go through some of the major questions that we had to answer.
Talk about two sets of our proposals X Anti-regulatory X Plus X Post Merger Enforcement.
And finally, talk about next steps.
So starting with that increased concentration, I'm now going to show you some pretty definitive evidence for it.
Those are the two beer companies we have right now.
One is called InBev. The other is called Heineken.
There's a lot of other, at least in the United States, craft beers that look like they're from small breweries.
But most of them have been purchased by one of these two companies.
This trend of many companies consolidating down in this case for the most part to two companies is something
you see in lots of segments of the economy in that paper for the Stiglitz Fest Shrift in two thousand fifteen.
I put together this chart. It shows something like 13 sectors and in 12 of them, concentration was increasing.
That is a smaller number of firms or firms taking a larger share.
And in one of them, it wasn't. At the time, I was very clear that and in a subsequent report, the Council of Economic Advisers put out,
it's not like you would bring an antitrust case against the transportation and warehousing industry
based on the fact that the 50 largest firms increase their market share by 11 percentage points.
You can have increased market share at this high level of aggregation and more competition in any given area.
Conversely, you could have a decline in concentration measured in this way and actually have, you know, less choices for consumers.
So the question in this isn't, you know, this is definitive proof of anything.
Of course it's not. It's is this suggestive. You know, what does it look like?
Since then, there have been a number of papers which have dug a couple levels deeper.
These are again all using aggregate macroeconomic data.
And they found things like in seventy five percent of U.S. industries,
there's been an increase in concentration level at the three digit industry level that the C.R. for the C.R. 40,
the share revenue share for the top four and 40 firms in the HHI,
which is a measure of how much competition there is in a sector, have trended up for six hundred and seventy six industries.
Another paper did add a more disaggregated basis and found increases in the HHI, et cetera.
These are all macro papers. These wouldn't stand up any better in a court of law, nor should they than the last set of papers I showed you.
The question is not can you poke holes in these types of measures?
And a lot of people have poked holes in these types of measures. It's like anything in economics.
Are these measures useful or do they tell you something?
And you know, these measures tend to be correlated with, you know, industries that are more concentrated, having higher mark-ups,
having higher profit rates, having, you know, lower investment relative to what you would expect them to have.
So it's a reasonably good explanatory variable for some of what we want.
There are a set of papers, and the point of this slide is not for you to read it,
but for you to have the sense that there's a lot of things on it that, you know, have that.
Iowa economists have done the types of studies that are closer to what holds up in a
court of law that looks in a really detailed way at a well-defined market and asks,
you know, is there more concentration in it?
And it's something we've seen in agriculture, appliances, beer, fertiliser, financial services,
hospitals, railroads, wireless, you know, amongst other industries in the economy.
So, you know, trying to look at the economy from the firm level, from the micro level in aggregate, it all up is tricky.
You can either take a really close look at, you know, one piece of the economy, which is what a lot of these papers do.
You or you can take a really blurry look at the economy of a whole. That's what the others did.
Both of those types of resolution seem to be.
Telling you a similar thing.
The question, then, is why has concentration gone up, why in most industries are there fewer firms today than there were in the past?
And they have, you know, by definition, larger shares?
In part, it's for good and natural reasons. And in fact, you can have more competition leads to greater concentration.
You could imagine a sector like retail where there's a lot of small businesses.
They're not very competitive with each other. Consumers don't have a lot of choices.
And then one or two big retail giants come in that are really, really efficient.
That increased competition that give consumers new choices and in the process, knock some of the smaller, inefficient businesses out.
You would observe in that sector an increase in concentration that increasing concentration would be evidence that there was more competition.
And, you know, broadly speaking, would be a good thing. This is something you see under the heading of superstar firms.
David Autor and Company and McKinsey have done analysis of that.
Globalisation can be a force for greater competition that can lead to increased
consolidation and finally increasing returns to scale and network externalities.
There's also a set of bad and unnatural causes for increased concentration.
If you used to stop a company from merging. And now you have some new theory and you allow the merger.
You're going to observe an increase in concentration that increase in
concentration isn't going to reflect any of the superstar firms or globalisation.
It's just going to reflect a policy shift. Similarly, if you have less antitrust enforcement, so firms used to be able to, you know,
raise it used to be stopped when they were trying to raise rivals costs or exclude rivals, and now they no longer are.
You could have more regulations that create more barriers to entry in a sector.
And I put to question Marks on it, because I think the jury is out on this literature,
but there's a large literature on the fact that with the rise of huge asset managers and especially index funds,
that even if there is competition between different companies, those companies all have the same owners.
So the airlines are all owned by BlackRock and Warren Buffett and State Street and BlackRock.
Warren Buffett and State Street don't have an interest in the airlines competing, no matter how many airlines they were.
If there is that number of owners? So there's a set of bad and unnatural causes as well that cause less competition.
These stories are different in different sectors in the US economy, I think retail fits the good causes story quite well.
And hospitals fit the bad causes story quite well.
Tyler Cowen has a new book out called Big Business, and he calls it a love story to an underappreciated institution.
He is much less worried about monopolisation of the economy than I am, but he also uses the example of hospitals as an exception to his thesis.
An example of something where we used to stop mergers. Now we allow them.
There's not really a whole lot of efficiency benefits to them. There are higher prices as a result.
So we're now 15 minutes into this talk, and I haven't mentioned the tech sector, which is the topic of the report.
Well, tech has a combination of good and bad reasons for concentration, and at a high level,
the key to policy is preserving the good reasons for the increased concentration in tech.
You know, the efficiencies, the benefit you have from being on a social network with your friends,
the benefits of the scope that a bunch of products can get bundled in together in a very seamless, convenient way for you.
So those are all good reasons for scale. But then there's a set of bad reasons,
ways in which there have been killer acquisitions or behaviour by the incumbents or others that I'll go into in a moment that we want to get rid of.
And in some sense, if you can design policy to get rid of the bad reasons and preserve the good reasons,
you can be a little bit agnostic as to what the outcome is.
Rather than saying, you know, we know in this industry there's going to be 20 companies or there's going to be two companies know.
We know in this industry we want to do everything we can to give entry and competition a chance and then we'll see how many there are.
There are. And that's part of why, you know, in proceeding on this, I wouldn't start from breaking the companies up and deciding that,
you know, we know the efficient scale that would get rid of some of the good reasons for that scale.
I would address the bad ones and then see what happens.
So, you know, a year ago, I could have given the talk I just gave you right now, and I would have ended right here and said, You know,
I have a good principle for how I think about digital competition, which is get rid of the bad things and keep the good things.
Sort of hard to argue with the idea that you want to get rid of the bad things that also are equally hard to argue with the idea.
You want to keep the good things. The trick is what does that mean and how would you do that in practise?
And so I was excited when the chancellor of the Exchequer asked me if I wanted to chair a digital
panel to answer exactly this question went into that discussion with a strong belief in competition,
a strong belief that left to itself, we wouldn't have competition, but pretty much no strong beliefs at all beyond that in terms of the form.
So I'll tell you a little bit about the expert panel.
Our terms of reference asked us to consider the potential opportunities and challenges as the emerging
digital economy may pose for competition and pro competition policy and to make recommendations.
In areas like online advertising, mergers, takeover and anti-competitive practises.
Opportunities to enhance competition.
And how to assess consumer impacts in services that are you always have to do the air quotes around free for consumers.
The panel have already named everyone, I think this is the only extant photo of the five of us.
But Philip, you can see, as I said, it brought computer science, law, economics together, had an excellent secretariat.
There are no extant photos of them. And we had 11 evidence gathering roundtables in London.
We got more than 60 written pieces of evidence submitted, many of them really quite thoughtful and quite extensive.
We consulted, you know, many other experts.
John Vickers is not responsible for any of the errors amongst them and engaged with governments in the United States,
France, Australia, the OECD and the G7 in the course of it.
For me, it was interesting because this wasn't just one part of the government that cared.
We were reporting into the Treasury and Bays, the Department for Digital, DCMS, digital, culture, media and Sport.
And then three regulators were interested to various degrees CMA, Ofcom and ICAO.
So there was a lot of trying to understand the existing functions and navigate a
complex institutional landscape and a distinction between government and regulators.
And in March, we came out with our report unlocking digital competition.
It's a report that, you know, is it's free, so you can all read it.
OK. You know, in coming up with recommendations, you want to start,
obviously with an analysis of the economy and I think different people who have
different ideas about what should or shouldn't be done in the digital economy.
Answer the following four questions in different ways from each other.
The first question is, is competition in the digital sector beneficial? The second is, is it absent?
The third is, is the lack of competition costly?
Presumes an answer to the second one, and the last is, can there be competition in the digital sector?
Just want to quickly take you through how I would answer each of these questions?
You know, when is competition beneficial? Competition is beneficial.
It lower prices, which give you higher quantities, a greater quality and greater variety.
If you think consumer preferences are good, then competition is a great way to satisfy those consumer preferences.
If you think consumer preferences are bad, then competition won't be helpful, and in fact, competition might be harmful.
And so people use digital platforms for different purposes.
That guy on the left is shopping and that guy on the right is clearly a terrorist.
If what you're worried about online is sharing information about how to commit terrorist attacks or child pornography or bullying or the like,
competition policy isn't going to be the solution for you.
In fact, competition could even make all of those worse by lowering the price, increasing the quantity, increasing the variety.
If what you're worried about is people connecting with friends, people shopping, people trying to find jobs,
people trying to open up their own small businesses, people trying to, you know, rate and establish trust networks.
People who care about privacy, which is something that consumers care about than competition, can help with all of those.
When you go to some of the discussions of all the different things people are worried about in the digital economy.
A lot of them are in the online harms type of sphere, not in the standard.
What consumers care about privacy would be something that's in the overlap of the two of them, because I think consumers do care about privacy.
They often don't have choices, like a friend of mine who, you know,
announced on Facebook he was quitting Facebook because he was sick of all of the terrible things the company was doing.
And from now on, he said, you can follow me on Instagram.
So, you know, there's just not a lot of choices in that regard.
But, you know, sometimes you go to conferences that are competition conferences and you have a lot of people wander around with hammers and to them,
everything looks like a nail. And you know, the answer to this first question of is competition beneficial is in a lot of cases, yes.
In some cases it's irrelevant. In some cases, it may even be counterproductive.
And so nothing I'm going to talk about is a substitute for anything you want to do about, you know.
Cyber terrorism, child pornography and possibly even issues like privacy.
And in fact, if you do more to increase competition, you're probably going to need to do not less but do even more on all of those.
It's a little bit easier to police some of that conduct if you have a single monopolist that has
a lot of rents that they can devote to it and that can have a relationship with the government.
Once you have 12 companies, you know, doing search, doing social networking during messaging,
you might need to do even more of the non-competition regulation as well.
So that's the first question, is competition in the digital sector beneficial?
I think in many cases, yes, but I want to start out that that's not always the case.
The second question is, is competition in the digital sector absent?
There's a number of ways to look at this. I'm going to start out looking at a point in time.
You know, this is the share time spent on popular social media services on Facebook and Instagram are one company, of course.
And that 75 percent snap is 20 percent.
Twitter's even less. And Pinterest is tiny.
This data from our report you can look at a lot of different segments like online search,
digital advertising, mobile operating systems and social media.
And you see, increasingly the market share of the top two companies is approaching zero.
And in all of these segments, the top two companies are drawn pretty much from one of five companies in all of them.
The dominance has been stable now for 15 years, and most of them have had stable now for 15 years or so.
And in many of them, there seem to be characteristics of the market that make it winners, take most or make the market tip,
whether that's the network externality that you benefit from your friends being on the network,
that advertisers benefit from advertising on the thing that has a lot of people on it.
Something like mobile operating systems, Microsoft had a quite good mobile operating system.
They had to pay people to write apps for their system because their market share was, I don't know,
twenty twenty five percent, whereas people were willing to pay Apple to write for iOS.
It seemed in mobile operating that having a third system, even if it was quite good, even if was supported by a major company, wasn't enough.
Google tried to enter social networks, couldn't survive there.
So there's a set of powerful forces that tend to lead to tipping that tend to lead
to market take most everything I'm showing you showed you like social media search,
mobile operating. These are all particular activities of companies at their heart.
Some of the major companies here are actually advertising companies.
They're not search, messaging, social networks and the like.
And in online advertising, you're something very close to a duopoly, with Google dominating and Facebook reasonably large as well.
The tougher question to ask is, you know, I've talked about whether this competition in the market,
you know, right now you have a choice of buying Pepsi, Coca Cola or other.
There is much less of that choice in digital platforms right now, so there's not a lot of competition in the market.
The hopeful story would be that this competition for the market you see here that earlier on MySpace was the dominant social network.
But then MySpace, you know, Facebook emerged and MySpace collapsed down to nothing.
This is the idea with Google. The competition is just a click away.
Maybe 90 percent of searches on Google now, but a good search engine comes tomorrow, and everyone en masse could switch over to that.
Everyone en masse could switch over to a separate social network other than Facebook.
And Instagram, of course, doesn't count tomorrow.
So is that possible? I think the answer is probably not, or probably not, at least given the current policies which I'll come to.
In part, the examples we have of that in the platform space were very early on in the development of the internet.
You know, the fact that Lycos didn't have a lasting monopoly on search,
I don't think is a particularly good reason argument against thinking that Google is pretty entrenched in the search business.
These are companies that have expanded their reach, expanded their scope, have bought potential competitors have.
Lots and lots of data, some of which has increasing returns to scale associated with it and thus serves as a barrier to entry.
And so, you know, we can't be sure. You know, I'm sure if we waited long enough, some of these companies would be unseated in some ways.
But, you know, competition for the market doesn't seem to be a whole lot more present than the competition in the market.
So what? These companies give products that people like, the products are free in air quotes.
Should we even care about this or be bothered by this?
I think the answer to that is yes. And that it is costly and there's a number of different costs.
The first one. Fiona Scott Morton is fond of pointing out that zero on, as she puts it,
is just another no nos to the left of zero and those numbers to the right of zero.
If you observe a price of zero, that doesn't mean the price isn't too high.
Might have been that the price would have been negative.
You would have been paid for the use of your data paid to be exposed to advertisers and because of lack of competition,
you were overpaying at a price of zero.
People aren't just paying relat over necessarily overpaying relative to a hypothetical.
You know, when you have an advertising duopoly, they'll be able to charge more for advertising that is going to be paid out of something somewhere,
maybe built into the mark-ups for those products themselves.
So it might be the things you're buying that you saw in the online ad you're
paying more for because the online ad itself cost more because of the duopoly,
so there might even be some cash. Consumers are paying in terms of data and privacy in ways that they partly understand, partly don't know.
Some of this is a counterfactual. What would the world be like if we had more competition?
Quality and variety might be better.
I certainly think, you know, something like the Facebook feed has basically not improved in the last five or more years.
Google searches have sort of more and more advertisements and have improved in other dimensions,
certainly something like Internet Explorer in the two years it went without competition.
Developed almost none of the tab to browsers and other things that the other search engines did.
And so that lost quality and variety is also very closely and intimately related to lost innovation.
So I think we should care about the lack of competition.
Then the last question is, in many ways, I think the toughest question.
Which is, can there be competition in the digital sector?
I gave you before a whole bunch of really good reasons to expect there to be tipping or a winner take most.
If you take those to the extreme, they would say this is just like a you tilt last mile utility that's delivering water to your house.
And if you had a single water company, it was charging people a lot of money for their water.
The solution wouldn't be to try to get three more water companies and have them compete.
It would be to regulate the price of that water company or if it was a telecom, make it carry other people's stuff in addition to its own.
So this question is, is the digital sector a natural monopoly like water?
Or is it a potentially competitive sector that just hasn't had competition because of inadequate policies?
This is the question I'm probably the least sure of.
But I sort of root for the answer to this to be yes, I think we should put in place policies that take us as far as possible,
assuming the answer is yes, but policies that would also work decently well if the answer to this happened to be no.
And if we discover more definitively that no, we may need to dial or pivot in some ways.
And you know, this question to me comes back to the same point I made in general terms,
not in the tech sector about sort of good and bad, natural and unnatural reasons for scale.
It's a good thing to have a social network everyone's on. It's, you know, some of these companies are very efficient.
No, there's an advantage to having brands, especially in something where, you know,
you're not quite sure if you can trust the person, you can't look them in the eye. So those are all natural things.
But then there's unnatural things to kill killer acquisitions, predatory behaviour by incumbents and then standards and data.
And I really wanted to stress this last one. Now, imagine a world where a single company had invented email.
And their email system could only communicate with other people that used their email system.
They several companies entered at once for some reason, a lock or a little small advantage.
One of those companies ended up with 95 percent of people on it.
And the only way you could send an email to your friend is if they use that very same system.
Somebody might come along and say, this is crazy. We should have lots of e-mail companies.
People should have their own choice about what company, what client and we should have competition.
Somebody else would say, No, you don't understand. There is economies of scale in email.
Do you want to break this email company up? And no one could e-mail their friends again unless they happen to be on the same system
or force people to have eight different emails so that they can reach their friends,
depending on who's on which one. Yeah, we could have been in a world like that, but we weren't because email wasn't developed by a single company,
it was developed in a public process with open standards that were interoperable.
And as a result, no matter who your email provider is, no matter what email client you're using to download, compose, messages,
store and the like, you can communicate with anyone else without even knowing what their system is or what client they're using.
And so some of these economies of scale aren't natural, like the laws of physics that say,
you know, is really costly to dig up hype to your house but reflect technical choices.
And the technical choices are made by companies with a motivation that may not be aligned with
what the social benefit is and may be aligned with protecting themselves at the expense of others.
Data to insofar as it's a barrier to entry or a natural monopoly,
I put it under the unnatural category standards, or Davies could have in some sense put them under either.
But I chose to put them under unnatural because again,
data has substantial spill-overs and it's sort of a choice about what our laws are about how we protect information,
protect access to the exclusivity, who owns it and the like that create the system.
We have nots, you know, natural thing that occurred.
And so our goal is, like I said at the outset as a general matter for competition, but in this sector,
it's to try to get rid of as many of these obstacles to competition as possible and then see if you get more actual entry.
More threats of entry, more people afraid about entry. More companies that want to grow up.
Not to be purchased by Google, but to be the next Google and see how far all of that gets.
So to summarise this part of the discussion, you know, these are the answer.
The questions is competition beneficial? I think for the most part, yes, at least for the purposes that I was most focussed on, is it absent?
And if it is absent, is that absence costly? Tried to argue yes.
If your answer to those questions is no, then you don't really need a policy.
You know, the companies are already competing with each other, so we don't need to do anything or they're not really competing.
But that's because everything's free and great, so you don't need any policy, either.
I don't think the no policy change is crazy. I think there's a lot of versions of policy change that would be worse than no policy change.
So you do have to be very careful here. So I think there's some merit in every answer to every one of these questions.
But I certainly think we can do a whole lot better than what we have now.
The last is, is competition policy effective?
And if you don't think it is, you need something more like utility regulation around the price, common carrier and the like.
If you think it can be effective, then you can have pro competition policy.
So I think, yes, I think different branches on this tree.
Have one way of categorising why different people come to different views on policy in this area.
So where does this leave us in terms of recommendations?
I'm going to go through the recommendations now. These were developed for the UK government in most cases.
These are ones that I think would apply to for any media, more large sized economy in the world and certainly would apply for and be,
I think, a great idea in the context of the United States.
I'm going to talk about ex-ante regulatory proposals first, because, you know, we discussed how far you can get with the traditional competition,
merger, antitrust types of rules and felt you couldn't get nearly far enough even if you stopped all mergers.
I think it would be a big mistake, but even if you did, the companies are already quite a large scale, even if you brought fine after fine.
You know, it's taken the commission a decade to deal with, you know, much of three cases and hasn't changed a whole lot.
There's also something when you have this ex post,
especially an antitrust approach on the something costly to it, it takes a long time can be very uncertain.
You can be fined for behaviour. You weren't quite sure whether you were allowed to do or not allowed to do so.
The fine isn't a complete deterrence to that behaviour in the future.
It doesn't set up a clear precedent for behaviour in the future,
and it's not flexible in a rapidly changing landscape because you might have a behavioural remedy,
but no mechanism to change and update that behavioural remedy as the economy changes.
It's not to say antitrust doesn't play a role and isn't important,
but we felt that a lot of where the enforcement needed to happen was set up clear rules in advance.
Be somewhat more detailed about how they'd function, make those rules focussed on easing entry,
and you know, in some sense, the debate between regulate or not regulate is almost a misnomer.
You're definitely going to enforce rules. The question is, you know, when are you enforcing them?
How are you writing those rules down?
So we proposed something called a digital markets unit, and we were agnostic as to whether this would be a new body,
a subsidiary of an existing body or just an office that existed in the CMA, Ofcom or somewhere else in the United States.
You could debate whether this is a new regulator, as recently proposed by Fiona Scott Morton,
or whether this sits in the Federal Trade Commission and the like.
The important issue, or at least the issue that we felt we had something to add on wasn't, you know, where this thing sits.
But what it does and what it does is something you could call participatory regulation with three main functions.
First is a code of conduct. The second is data mobility and open standards, and the third is data openness.
The code of conduct would only apply to companies with strategic market status.
There would be a process, something like what Ofcom has already to designate companies with significant market power or what
the United States F SoC has to discover designate systemically important financial institutions.
Syfy's The designation would last three to five years and you could renew it and re designate the companies,
those companies or companies that are gateways sometimes called bottlenecks that you basically
need to get through them in order to access everything else in the online platform.
And those companies would have to subscribe to a code of conduct that code of
conduct for the business side of platforms would be based on a set of principles.
It would be fleshed out through the participatory multi-stakeholder process and
would be things like providing access to the designated platforms on a fair,
consistent and transparent basis. Things like prominence ranking in reviews are done the same way.
You couldn't be restricted from or penalised for using alternative platforms.
Just to be clear, if I want to start a small business tomorrow and not let anyone else on my platform or say,
if you want to be on my platform, you can't be on anyone else's. Or have my search engine favour my results over anyone else's.
That's fine. Small businesses, even medium businesses, wouldn't fall under this code of conduct.
This is just for companies that are acting as gateways.
The that would be the first part of what the digital markets unit would do.
This isn't wildly different from what's lying in the back of antitrust law.
It's similar in spirit. The difference is the ongoing monitoring flexibility in its application.
And you know, this isn't self-executing. I think if you have a competent regulator that does a good job of this, it would be a great thing.
If you had an incompetent regulator that did a bad job of this, I think it would be a problem.
And you need to figure out, you know, your judgement about how to weigh the costs of the existing system versus some of the risks.
But on balance, I think we're in some sense already doing this through antitrust.
We're just doing it in a clunkier less predictable manner.
The second part of the digital markets unit is the data mobility and open standards.
We chose the word data mobility because it's not just portability,
portability and the GDPR sense might just be that you can download the data and bring it with you.
Data mobility says that you can import your data from system to system.
Open standards are the type I talked about with email and why we have lots of email companies right now and with data mobility and open standards.
You know, what's clear is this isn't just a law you can pass that says you need data mobility and open standards.
You know, now you go ahead and do it. This is really important and complicated technical issues and how to do this.
There's really important privacy issues and other sets of concerns.
So this is certainly not self-executing. There are private efforts underway right now,
like the digital transfer project that the major companies are a part of to share photos and the like that are doing some of this data,
mobility and open standards.
The problem is that those companies don't have the same incentives that we do as a society to do that to the fullest and make all of that succeed.
And when you had open banking here in the United Kingdom, which was a requirement that nine eight.
Eight, eight, eight,
eight large banks would have to essentially open up their APIs and allow a whitelisted set of fintechs to build applications on top of it, you know,
absent being somewhat prescriptive and having a well-funded implementation entity that goes through the use cases,
figures out the number of screens, figures that how you can do it.
You can end up having data mobility and open standards in theory, but in practise it's completely unusable by consumers.
So this is something where you have to go through, you know, messaging, social networking, trust systems and the like and ask, Can it work?
Can it not work? Do we have the funding? Do we have the people to figure it out?
The third function of the digital market unit is data openness.
I talked a little bit about the sense in which in some cases there's increasing returns to scale to data
in the economy that access to data can effectively exclude and act as a barrier to entry to others.
This is again not one where you can pass a law saying, you know.
Facebook, go ahead. Open your servers up, let everyone look at everything. That would be a terrible thing to do, but can you make data trusts?
Sydenham ized data some types of data.
No geospatial mapping data used for autonomous vehicles.
You're not going to make the competitive advantage of a company that they know there's an obstacle that's going to kill people.
And another company doesn't. Again, you need a you can't just pass a law.
You need a unit to do this. You need a unit with expertise and one that's going to go through the different use cases.
So the digital markets unit is the most important proposal that we made.
It's one that there is authority in the UK already to do a certain amount of all of this, but certainly new authority would be needed to do all of it.
In the United States, there's a debate about whether the FTC has under Section five its own authority to do all sorts of things,
including these types of activities or whether new authority would be needed.
Would not confine, you know, this is a little bit of a belt and suspenders type of approach.
And the traditional competition policy has an important role to play too with,
you know, which depends a little bit on your perspective on competition policy.
I won't spend a lot of time on this, but we can do it in the Q&A. But there's a traditional big is bad approach.
There's Robert Bork big as efficient. These are both grossly caricaturing those two approaches.
We situated ourselves with Robert Bork in terms of believing in economic analysis,
believing you need to sort of work through the efficiency questions and not just assume big is bad,
but then that with modern economics, when you do that, it turns out that.
You know, there's a probably greater range of things to be concerned about using this traditional economic tools than the Chicago school was,
a lot of people are in this approach to competition policy but haven't coalesced around a name so Chicago, plus the Taft School or just being correct.
So I won't spend a lot of time on these recommendations, but we can talk more about them.
One is that merger assessment needs a reset. I spelled this so you all could understand it, prioritising scrutiny of digital murders,
updating the merger assessment guidelines, including emphasising potential competition innovation.
We have an important idea on instead of saying Is there a fifty one percent chance of mergers a problem?
Asking How bad a problem is it if it happens?
You know, if you're going to buy something and you know what have been your competitor and now it can't be anymore, you might have a really big harm.
Even with a smaller chance of that happening, we should be worried about it.
We considered and decided not to have a sort of blanket ban or presumption against the major platforms acquiring companies.
That idea might make more sense the United States than it would make in the UK, and it's worth thinking about more there.
But all of this is designed to get at the fact that we basically haven't challenged any platform acquisitions.
So we've never really made a false positive where we accidentally blocked a merger we shouldn't have.
We probably have had a number of false negatives where we didn't block a merger and maybe we should have antitrust.
These are very no offence to lawyers in the Weeds UK specific things about the
Competition and Markets Authority getting more independent decision making. The Competition Appeals Tribunal reviews, you know,
more limited in certain types of ways you to sort of take a thumb on the scale that's currently
sort of adds extra hoops to jump through to do antitrust and try to streamline that.
And then there's a number of other recommendations,
like a market study of online advertising and monitoring, algorithmic collusion and personalised pricing.
This is where algorithms collude with each other to set higher prices something again we can talk about.
So in terms of next steps, as Ian said, this is not the only issue being debated in the United Kingdom right now as I understand it,
but there is quite active effort on the part, especially of civil servants in the government that are reviewing this set of proposals.
Another one from DCMS on online harms and the third one from Frances Cairncross on the media,
and I'm hopeful that they'll come out with some ideas and recommendations.
CMA has been publicly positive about most of what I just said.
I know the chancellor and others have been very positive as well, and there's also a growing global conversation at the G7.
The Stigler centred Chicago recently came out with a report that looks an awful lot like ours, except they put their antitrust chapter.
Before the regulatory chapter. We did the regulatory chapter. Before the antitrust one.
The European Commission had special advisers. The Australians had to report.
The OECD has done things. The FTC in the United States has been holding hearings.
So there's a big global conversation about this as well.
And you know, well,
I don't think we're ever going to have coordinated global action to have similar actions happening at similar times in similar countries.
I think would be certainly the most efficient and effective way to address what is genuinely a global economic issue.
Thank you.
Thanks very much, Jason, for that remarkably broad, clear exposition, not only of the issues you focussed on in the review, but the wider context.
Your capability of sort of looking at the very big picture and getting down into granularity,
not least from a policy or investment perspective, is quite remarkable.
And it's good to know that not only was the UK government very wise and timely in appointing you,
but that this is part of a force that is bigger than the current government and something which is obviously of extreme significance.
So we have about half an hour for discussion questions and answers.
It is being webcast,
so just be aware of that when you pose your questions and we have clearer with who's the organiser of all these events with a roving mic.
I'd like to go first. And people will identify themselves, right?
Yes. Hello.
Thank you for your talk. My name is Ariana. I study cyber security. I specifically consent and privacy.
So we mentioned that people are paying, consumers are paying in terms of data and privacy.
Would you mind just expanding a little bit on what you mean or what you prioritise and what you focus on when you talk about that,
how consumers are paying in terms of data and privacy?
Yeah, I mean, I stopped at a cafe this morning and tried to get online and asked them what the Wi-Fi was,
and they told me it was O2 and that took me to some screen where I had to enter my mobile number.
And then it sent me a text to, you know, you've all probably done this a lot.
And then it took me to the screen and there was a box. Can we share your information?
And it was with that cafe in particular that you just gave, and I didn't check the box and wouldn't give me the Wi-Fi.
No, that's not unreasonable. I mean, there's no reason, you know, the cafe wouldn't give me, you know, a coffee without me paying either.
So there are free business and they can offer something in exchange for something else, and you have a choice of whether or not to do that.
I just think you then can't call it free. And so that's so I'm not objecting to charging in various forms.
You know, I find the advertisements in magazines and newspapers pretty annoying, and I wish I had a thinner magazine with no advertisements.
But, you know, I don't want to pay four times the price for that.
So we have to pay for things somehow, and we don't love any of the ways of paying for things, including parting with cash.
So my two main point, my main point there was just that.
You know, the defence that these are free so you shouldn't be worried isn't a very good defence when you're paying in some manner.
And then, yes, I think you worry. Maybe people don't quite know what they pay.
If you pay one pound, you know you paid a pound if you check the box on a form.
What did I just give them? How much are they going to take from me?
You might need some additional consumer protections of a type you don't really need around the price of coffee.
Someone wants to charge you 20 pounds for coffee,
and they're probably not going to sell a lot if they want to charge like massive data violation in exchange for something,
you know, maybe you didn't realise you paid massive instead of just a little.
And so some consumer protection may be needed, you know, because you don't quite know the price you're paying.
Is anyone on the that terrorism doesn't all the other way?
Thank you, I thank you. I'm Silas. I'm at the Oxford Internet Institute.
And you mentioned that policy that fosters competition might also require more regulation,
and the costs of that regulation would go back to the consumer, presumably through taxation.
So do the do the sort of benefits of the cost benefits in terms of increased competition versus the costs of higher taxes.
Do they count each other or is there an optimum point that's reached right?
So there's two types of costs. One is like literally the cost of paying the people that work in the regulatory unit.
I think that would be relatively trivial compared to the size of these markets and so that if it improved consumer welfare buying.
You know, 0.01 percent that would weigh more than offset the cost of those people, so that's not a trivial or an irrelevant thing.
But it's not what I'm most worried about. We didn't make this recommendation in the report,
but certainly one model you could have is just some form of fee on the activity
of the type that we have in a number of other sectors to fund the regulator.
So there's that cost, which from your question sounded like that's when you're talking about the second cost of if the regulation becomes a
barrier to entry so someone else can enter or constricts your social network to adopt a certain form that's interoperable.
And so you don't get to invent a new type of social network with some new type of features.
And, you know, I think that's a risk, but I also think it's a benefit if you are creating something so a new social network enters.
And if I thought Facebook was innovating at a really rapid pace and its feed,
I'd be more worried about getting in the way of it when that seems like it's not innovating that much.
And maybe we could have other companies come in.
And if we do, that would either force Facebook to innovate more or lead the other ones to another case where you have that is, you know,
venture capital like venture capitalist exit strategies selling to a big company because that can increase the demand for innovation.
But it can also increase the demand for certain types of innovation that don't
threaten certain business models or that complement them in certain ways.
And so maybe you get less of a demand for certain type of innovation if you make mergers a little bit harder,
but more of a demand for, you know, another type of innovation. If you make killer acquisitions harder, so I think these things are balanced.
But I wouldn't worry too much about the group of people doing this.
Hi, my name is Danny. I'm a doctoral student in the politics department.
And I also recently enjoyed your recent interview with Margaret best there.
I thought that was really interesting. Margaret Forster, you had an event that I was really good.
I have a question about what you said last about your. Prospects of coordinated global regulation or coordinated global action,
do you anticipate that we might look at a kind of a soft law approach with a like a Basel type standards?
Were there a set of voluntary standards, but there is no global regulator for something like this?
And if so, what? What are the standards that you see developing?
Obviously, you have your own report here, but are there common links in the in the kind of programmes that you put up in there last night?
Thanks very much. I don't know the answer to your question with any remote degree of confidence,
but one the really big difference between the sector and the banking sector is that every country has banks.
And the major digital platforms are all in one country and that everyone is going
to give up a little bit in terms of their ability to set rules for their own banks
in exchange for everyone else having rules on their bank so that their banks can
blow up the global system is a little bit of the bargain that's built into Basel.
And I don't see how at the current moment you could reproduce a bargain like that here.
I think there's some places where, you know, there's common interest, and I found this in the U.S. government when I was in the government like,
let's say, on taxes, we could put in our budget a proposal that was quite tough on multinational overseas tax avoidance.
If our budget proposal had been passed, the result would have been that that multinational would have paid more taxes to the United States.
But it also wouldn't have been able to hide its UK subsidiary income in the Cayman Islands, so it would have paid more taxes to the UK.
We put that in our budget.
But then, you know, the company would come to the Treasury on a particular issue that happened in a particular country and say,
like, you know, look like the UK is doing something and they're taking more taxes from us than we're an American company.
Why would you allow that? And we tend to side with that company. So we'd have a sort of social welfare improving policy in one space and then
a bit of a rent seeking captured by American company policy and other space.
And those two would co-exist. I worry this could be a similar space.
You know, I think open standards and data mobility.
No, that's not like a way to hurt the United States and help everyone else.
That's a way to help people in the United States have more choices,
help new American companies enter the market and succeed, and also help new UK companies, French companies and the like.
So I don't think in reality, this is a zero sum thing.
In fact, it's much less zero-sum than taxes, where like, sometimes it is the case that this country collects it, that country doesn't.
So I think it's really positive. Some I just don't trust that the political system would always see it as such.
OK, thank you. My name is Greg Taylor, I'm an economist at the Oxford Internet Institute.
So you mentioned the example of mandating the sharing of geospatial data for autonomous vehicles,
and that has very obvious static efficiency benefits.
And but one might worry that if we do that, then the incentive to generate those sorts of data sets in the first place would disappear.
And I wondered if the panel spent much time thinking about those sorts of dynamic inefficiencies.
Efficiencies could be avoided, right? Yeah, I, I think spend time and sitting on it.
I don't think spend time Philip can correct me coming up with a great answer.
In some cases, where you have those types of external benefits.
Yes, you do, you know, assign property rights and give somebody a greater return to them or you have more public investment in the activity.
I think there are, you know, and and I find, you know, part of why our answer was what it was, wasn't that,
like all the merit is on one side and all the merits on the break the companies offer you do nothing that a lot of these are sort of good things.
And it's bad that, you know, like the acquisitions, like some of that's a really good, efficient thing to take a company and acquire them.
Some of it's an inefficient thing because you're foreclosing. And you know,
that means a certain amount of judgement and all of this and asking questions like
you did and coming up with better answers than the one I just didn't give you.
Do you want had anything? It's kind of high.
I'm and tired, I'm a researcher at the Martin School, so my question was on your last point on personalised pricing.
And I wanted to know what your stance on regulating that is because on one hand, you know,
producers benefit from price discrimination, but on the other hand, consumers lose out on their consumer surplus.
So what's the right way to actually regulate personalised pricing?
I should confess my views on personalised pricing are sort of more traditional.
Economist views of this is efficient because it allows the quantity to be greater.
You know, if some people are willing to pay a little bit for something, some people are willing to pay a lot.
People are willing to pay a little bit, you know, get a low price, they buy it.
You only will pay a lot. They get high price, they buy it so you increase quantity.
And that's what we're ultimately concerned with. And I think it often has features of equity and that the people are willing to pay more often
our higher income people that Uber might charge a higher price to somebody who gets picked
up right in front of Goldman Sachs rather than a half a block away because it's doing a
personalised pricing and figuring out who the person is is of all the injustices in the world,
probably not like the one that bothers people the most.
So I confess I'm a little bit less bothered.
That's why a lot of our recommendations are in this sort of monitoring and get to is the personalised pricing.
Sort of abusive or unfair or against protected groups and the like, you know,
sort of who is it directed at and how not, you know, the existence of it and let's say is,
I think the puzzle is that there's so little of this right now in Amazon for does a lot of different prices at different times of day.
It does not charge different people at the same moment, different prices.
And you know, there's a, I think, a huge social obstacle to there doing that.
But one day they'll overcome that and it'll be just like an aeroplane where the person sitting
next to you had a completely different price for the same product that you just bought.
If Johnny may not be gay partners, I'm looking at the US over here, 10 year time span.
Which of your recommendations do you think are most likely to be implemented? All of them.
I think we're getting the picture right. Right, right, yeah.
So first of all, the FCC, the FTC, which is one of our two, we have two competition enforcers in the United States,
the FTC, the Department of Justice and the FTC has had a set of hearings on the questions we've been talking about.
The Department of Justice invited me in to meet with them and talk to them about this report next week.
So even within this government there, the current government, there is interest.
There's definitely a lot more of interest in these questions on the Democratic side,
and I've gotten more questions and engagement on that side, I think on regulation.
Mark Zuckerberg's out there calling for Facebook to be regulated less about the competition side than a set of behaviours.
So I think on that in a decade, there's going to be more regulation.
It's just a question of what form does it take and as it sort of.
Well, designed and conceived, or is it something other than what we proposed and on mergers,
I think the dial is going to turn in the United States, not just in the tech sector, but more generally.
Making it more scrutiny of mergers. The issue there is that absent a legal change, it's the same judges.
And so we've had hospital mergers that very conservative Chicago School FTC Commissioner Josh Wright have voted against,
allowing the hospitals to merge and then end up losing in court, where the court says, oh, like the executive said, it was a good idea.
So we're going to overturn it and allow it. So I think mergers will get tougher, but there's a constraint on that.
And I don't predict any real antitrust action, like breaking companies off.
If we've got the money.
Hello, I'm student fund geography, and because I heard the news yesterday that Google would not provide any services to Chinese company Huawei.
So in that sense, the digital competition is kind of a competition between countries rather than between companies.
So in this context, do you still think the regulation is to be put on two countries?
And if so, how can you persuade the two countries to obey the regulations that you recommend?
Right? I think the US decision on Huawei was genuinely motivated by a set of national security concerns and no.
I don't have current up to date information on those national security concerns, but I think there's some merit to them,
so I wouldn't look at that through the prism of the competition policy type of issues.
I was talking about, I think if the United States had complete confidence in, you know,
why way not engaging in espionage and the like, then Google would be free to sell it.
So I don't think that was. I think Google's business decision would have been to continue selling to walk away.
That's what Google would have liked to have done. I think if it was just up to US economic policy, that would have happened.
I think there a national security issue that, you know, rightly or wrongly, but certainly not utterly spuriously, was what that was based on.
I'm John Hofmeyr from Oxford's Centre for Mutual, an employee owned business.
I have a question about your slide that had to do with obstacles to competition.
And this was under the unnatural category and I was hoping that you might feel comfortable just giving an example or two of predatory behaviour.
Yeah, this is if you give priority to, you know, your own products when someone's searching.
And again, if you're one of a million companies, that's fine.
But if you're a major one, it is, you know, in your search results putting, you know, your sales first instead of others,
making a condition that if people want to sell with you, they can't sell somewhere else.
You know, all of these types of things, and we have a high degree of tolerance for in the economy as a whole, probably rightly so.
In a higher degree of tolerance now than, you know, the doctrines of antitrust would have said we should have had 30 years ago,
but that, you know, in this space, we need to be, I think, more concerned about.
With the companies that have a strategic market position. Hello, my name is Beatrice.
I am a researcher at the Blavatnik School of Government.
And my question is about the definition of the market for your assessment because the market definition seems
to be very relevant both for the regulatory approach and for the ex-post competition policy perspective.
And I was wondering when you were discussing whether or not the digital market is concentrated,
you showed some practise to assess the relevant market is advertising revenue or
numbers of the time that the hours that users spend online and things like that.
I think we have the tools and analytical framework to assess the relevant markets for many of the online platforms that we have nowadays,
considering that they are more two sided markets and many of them have this kind of ecosystem environment where they influence other markets as well.
Yeah. So on the Australian Consumer and Competition Commission,
triple see whatever there that stands for their report on digital platforms said We were assigned the price,
you know, project of digital platforms or digital markets. We set out to do it.
We've done all this research and we realised that this entire report is about Facebook and Google.
And so for the next 400 pages, we're just going to refer to the two of them and not say digital markets.
We say digital markets and digital platforms throughout.
You know, certainly a disproportionate amount of that is, you know, certain companies and certain platforms.
Part of it is that the digital markets unit would need to figure out through
this strategic market position and what other parts of the economy it applied.
Certainly. And I completely glossed over this in my speaking today, but I think we didn't gloss over this in our thinking.
You know, these platforms are very, very different from each other in terms of their business models and the like.
And so that's again, why there isn't like an answer, but types of answers.
And then you figure out how to apply the types of answers to the different markets.
But all of them have in common that, you know.
There are some, you know, gateway entry point bottleneck that you need to go through them to access other
things in a broader economy like a road that standards and data matter quite a lot.
So those would be some of the common features and thus the common policy levers we'd have in the different platforms.
Thanks, Nikita. Well, I'm a researcher, the Faculty of Law and the Oxford Internet Institute.
I was at a question about the first function that you described as the digital services unit,
which was, as I understood, designate designating systemically important companies.
And you drew an analogy with the Sufis and the sort of post-crisis paradigm of the FSB and so on.
So I'm I'm curious to know how you imagine systems being defined in the technical technological context or in the tech sector where, you know,
sort of the parallel of freezing deposits or access to sort of systemically important financial functions doesn't quite translate in the same way.
Right now, if you have a small business and you want people to find you, you need to be,
you know, findable on Google search engine because that's the way people find you.
If you're selling products, you know you may need to be able to sell them on Amazon because that's where I think half of online shopping is.
If you know to Harvard for its newly admitted students, set up a way for them to communicate with each other.
It uses Facebook and the students need to go on Facebook if they don't want to be excluded from the ability to,
like, get to know and see if they know any of their classmates. So the characteristics that these have is, you know,
that word I keep using gateway or bottleneck that it's something to access other things, you know, like a road,
like a fibre optic cable, like a water main that you know, you sort of need to travel over,
get through for a broader set of things, not just for accessing that company's products.
OK. I'm Martin Chalmers. I have a corporate background, but I'm currently an independent adviser in digital business transformation,
and I'm interested in how the success of the proposed unit and policies will be measured.
So will it be on an input basis? How much of the increase in competition or will there be outcome measures of success?
Are we making society healthier and given the complex trade offs involved, is thinking about that possibly part of that consultation process?
So of course, there could be advantages to managing the change with industry making that part of that process.
Yeah, we had an epilogue or conclusion to the report that tried to sketch out what it might look like for consumers to see
greater ability to interoperate between different products to multi home or to switch than you're currently able to.
For, you know, businesses, you'd see more start-ups flourishing, you know,
building their products on top of others or building independent rivals to them.
And, you know, in the economy as a whole, that would sort of look like, you know, more innovation and and more choice.
So are those detailed benchmarks such that, you know, like GDP?
I could say if it goes up this amount, we succeeded in that amount, we failed.
Certainly not and actually can think a lot of economic policies that you could benchmark by GDP, either.
But I think you two want. You know, yes, you want things like the cell phone number portability where I think it happened here,
it's certainly half of the United States where you take your cell phone number from company to company,
and all of a sudden people have been locked in. We're able to switch and that increased competition prices came down.
I think a lot of people knew that that happened, and even if they didn't,
they certainly knew they were seeing a lot more advertisements and enticements to switch and did switch more.
Thank you. My name is Scott Gisele's, and I am not the economist.
I came from the educational field. And my question is you mentioned a few and a few times there.
The them fill a hole in free and competition market will decide what is a fail
fail and how and what is their theory about what is fair competition and market.
You also mentioned the businesses the necessity to achieve a thrust.
You can achieve class in global markets and city.
You have a lot of enemies around you.
And you also mentioned that we should move to balance the.
What is good balance of who will decide and decide what is a good balance of the?
There's a lot of different questions, I think. You know, again, if it's sort of if you have competition,
then you don't worry that much about fairness or company cafe can charge 80 pounds for coffee.
That's not unfair. It's just a stupid thing for them to do because they're not going to sell a lot of coffee.
And the remedy for that is people not buying from that cafe.
When you have, you know, one or one or two companies, then I think it's sort of a little bit harder not to use words like fairness,
even though I think underlying those there hopefully is some notion of efficiency.
That one's getting out for something like balance of harms that would be, you know,
that would be the competition and markets are they bring merger cases now.
They already review a merger and they say, you know, trying to determine whether this merger is in the interests of consumers or not.
The shorthand for that is will it result in a substantial lessening of competition?
And the answer is probably, you know, won't be good. And if it doesn't do that, then, you know, great, be more efficient.
You know, we certainly wouldn't want to stop it.
And so they have a set of judgements they make right now under economic procedures and they'll do modelling.
And but they also look at, you know,
emails people send to each other and they'll like and they'll render a judgement and then the courts get to review that judgement.
And so that's exactly how it would be here.
If it was about a merger, the balance of harms would be CMA making the judgement and then the courts could review that judgement.
Thank you. Yeah. Final question. My name is David, and I work for the UK Economic Statistics Centre of Excellence in London.
I have a question about you mentioned the role of data and algorithms and intangible assets in general,
and we know that these are highly mobile across borders, obviously.
And I think going back to your last slide, I mean, I wanted to what degree than we actually need a kind of multi lateral approach to these things.
And he would like to know your thoughts on kind of reasoned proposals on trying to tax revenues or using networks in that regard,
rather than profits of companies, which are tricky to allocate, obviously. Thanks.
Oh, I mean, if we could have a really a fish and expert global body to do this, that would be better than lots of national ones.
But I just don't think that would happen.
I don't think we'd have a global body, and if we did, it would look more like the entire national telecommunications in the ITU than it does.
You know, the digital markets unit, which at least to date has not done a single thing anyone can complain about.
So I just think this is a matter of being pragmatic that yes, have G20 discussions,
G7 discussions or OECD discussions you have when you have this in mergers now,
I mean, there is relatively similar rules under which what mergers get allowed and don't get allowed in the United States era.
You know, Australia, New Zealand, et cetera. Companies can reasonably predict that if something's not going to be allowed,
it's probably not going to by multiple of them or it will be allowed by multiple of them, so they use similar rules.
Conferences have lots of people flying back and forth and a lot of the same economic experts.
But at the end of the day, it's DG Comp or the CMA or the FTC or the DOJ making the decision.
They may even communicate with each other if it's an international, but it's not a group decision.
So I think that's the best we could aspire to is a similar set of rules, but each being applied and enforced separately.
Great.
Well, thank you for that very rich set of questions, many, many questions, and thanks, Jason, for being so concise and effective in answering them.
We got through many of them. And I think I'm certainly amazed by the breadth and scale of what you are grappling with.
Thanks for coming and spending the evening with us. And thanks to you and all of you for coming.
Thank you.