Obama economist to review digital economy
BARACK OBAMA’S top economist has been hired to review the digital economy in the UK amid concerns the vital and fast-growing industry is dominated by giant American companies.
Jason Furman, now a professor at Harvard, will head up the investigation for HM Treasury from September.
He has recently spoken out in favour of giving consumers more control over their data, but also warned that traditional anti-monopoly policies – such as breaking up dominant firms – may not work in this instance.
“In the case of the technology sector there are tremendous efficiencies from the innovation associated with leading companies and their scale.
“But the network effects also create tremendous barriers to entry in areas such as online advertising, search, and operating systems for mobile phones and computers,” he said, giving evidence to an OECD investigation.
“Traditional antitrust remedies would risk these efficiencies, but doing nothing risks a slowdown in innovation accompanied by increased inequality.
“At a minimum, encouraging greater competition through more individual ownership of data and encouragement of common standards could help set the right balance.”
Mr Furman’s appointment comes shortly after both Facebook and Google received fines from regulators in Europe.
His remit in the inquiry for the Government includes ensuring that “new firms can adequately compete, allowing choice to consumers and encouraging innovation”.
He will also look at the rules around mergers and acquisitions, as big firms have been accused of simply buying up smaller rivals.
The impact of vast amounts of data being held in a tiny number of companies is also on the agenda, as is the concentration of digital markets.