Europe vs. corporations

Antonio García Martínez, a former Facebook employee, thinks that the European Commission’s recent decision to sanction Google for abuse of dominant position is absurd. He accuses the Commission of not understanding either tech or innovation, and of being biased against US-based companies. Brussels even suggested that Google’s search algorithm be regulated by law, meddling in something key and very difficult to understand.

The account provided by John Naughton on the same topic is more nuanced. Naughton observes that the Commission has come down hard also on many local infringers of competition rules. The underlying issue here, however, is a difference in regulatory culture. In the US, the prevailing concern is about consumer welfare: as long as prices do not rise, a monopoly is tolerated–which is why Amazon has thrived despite becoming a colossus. In the EU, on the contrary, regulation is more focused on competition, so that and dominant companies are deemed to have a special responsibility not to abuse their market position by restricting competition. While this is sound, problems remain about the efficiency and speed of regulation. If societies are to be able to bring companies such as Google under effective democratic control, then the regulatory process needs to be sped up.

Trade and Regulation in the EU

Cecilia Nahón and Sandra Polaski extend the argument in favour of more regulation to the case of the G20, by claiming that globalization and financialization have always generated winners and losers, but that the cumulative share of losers has increased, in some cases dramatically. The flip side has been the accelerating concentration of income and wealth on the top 10%, and particularly the top 1%. This leads people all over the world to believe that the global economy is working for the benefit of the few rather than the many. Trade is not an end in itself, but a means to greater economic efficiency, which in turn is a way to increase living standards.

Iain Begg ponders about the reflection paper published by the Commission on deepening the economic and monetary union. He assesses the strategy for reform put forward in the paper, claiming that the latter is relatively guarded and does not convey an explicit trajectory for the next stages of development of EMU governance. He adds that unless and until there is a greater sense of urgency when it comes to pursuing reforms, the Eurozone will remain vulnerable and could easily drift into a fresh crisis, which the Union is still ill equipped to resolve.

Adam William Chalmers and Lisa Maria Dellmuth present an analysis about the relationship between EU public spending and support for the EU. They conclude, first, that there is strong evidence that the Union can improve public support in regions where the fit between economic need and spending is better. Second, they claim that EU spending has a larger effect in redistributive spending areas than in distributive spending areas.

Finally, on Social Europe John Weeks attempts to disproves two common fallacies about Theresa May’s Brexit strategy. The first one is that May has no clue about what to do. On the contrary, Weeks claims that she is duly pursuing the project of the economists for free trade , which implies ending EU-type environmental regulations, protection of workers’ rights, and product standards for consumer protection. As this neoliberal outcome will prove unpopular among British citizens, the British government must cast the blame for a “bad agreement” on the European Commission. The second fallacy to dispel is that the European position is united: in fact many division exist both between member states and even within them. Again, this misrepresentation will be useful for the British government as a tool to shift the blame of the neoliberal result they desire towards Europe.


This Ideas Monitor is by Carlo Burelli and Alexander Damiano Ricci


Photo Credits CC Ars Electronica


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