Exam date

When's the 2016 exam? Wednesday 8th June, am.

Saturday, 18 April 2015

DEREGULATION GLOBALISATION Robert Bork + why EU tackles Google monopoly when US doesn't

I was aware of Robert Bork, but couldn't have pinned down his relevance to the media (de)regulation issue before I'd read this excellent article by John Naughton, intriguing enough to interrupt a time out in the fading sunshine!

The news hook is that the EU have announced an investigation into Google's practices, giving them 10 weeks to respond to an accusation of monopolistic strategy. Naughton highlights the stark contrast with the US, where the FTC (Federal Trade Commission), faced with the same data as the EU's competition commissioner (the US actually passed it on!), decided not to take a case ... despite several staff apparently arguing they should.

This is where Naughton draws on the writings and influence of Robert Bork, one of the foremost theorists of the neoliberal, deregulatory ideology that has slowly gained hegemony since the New Right movements of Thatcherism and Reaganomics took hold in the early 1980s.

Previously, whilst free market advocates assumed, in contrast to left-wing analysis, that deregulation does not lead to monopoly, they were still generally opposed to monopoly where it occurred. As several high profile privatisations effectively swapped a private monopoly for the previous state monopoly, ideological cover was required, and Bork has helped provide this.

Note the role of globalisation too: technotopians like Dan Gillmor (to be fair, he has modified his initial stance) might disagree with the likes of John McMuria, Andrew Keen, George Monbiot and Naomi Klein, all critics of how globalisation has worked as a force for advancing the neoliberal, deregulatory agenda and hegemony.

Bork argued that some monopolies were actually quite a good thing, an expression of efficiency and innovation which shouldn't be punished for their success.

The argument is remarkably similar to that advanced by right-wing parties to justify cutting tax rates for the wealthiest and conglomerates; that to target these for punitive tax or regulatory measures would be to punish them for their efforts and success, and entrepreneurial risk-taking.
 
To those of us who follow these things, the most interesting thing about Thursday’s announcement is the way it highlights the radical differences that are emerging between European and American attitudes to internet giants. The Wall Street Journal recently revealed that the US Federal Trade Commission had investigated similar claims about Google’s abuse of monopoly power in 2012 and that some of the agency’s staff had recommended charging the company with violating antitrust (unfair competition) laws. But in the end, the FTC backed off.
Now it turns out that its staff had been in regular communication with the European commission’s investigators in Brussels, which means that the Europeans knew what the Americans knew about Google’s activities. But the commission has acted, whereas the FTC did not. Why?
Leaving aside conspiracist explanations (eg that the American authorities don’t wish to enfeeble US companies that will ensure continued US economic hegemony in the digital era), the difference may be a reflection of the way in which antitrust law has been gradually infected by neoliberal ideology. Once upon a time, it was taken for granted that industrial monopolies were, by their very nature, intolerable for the simple reason that, as Lord Acton famously observed, power tends to corrupt and absolute power corrupts absolutely.
But then a radically different idea was injected into the legislative bloodstream by Robert Bork, a distinguished American lawyer, in his 1978 book, The Antitrust Paradox. One implication of Bork’s argument was that overwhelming market dominance was not necessarily a bad thing. Monopoly could be a reflection of a firm’s superior efficiency: we should expect truly exceptional firms to attract the majority of the customers, and so overzealous antitrust prosecutions could effectively punish excellence and thus disadvantage, rather than protect, consumers.

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