Europe battling big tech
AGReAT failure of europe is that, in spite of all its engineering and technology expertise, it has failed miserably to replicate the success of the US in creating and expanding the reach of digital giants Facebook, Apple, Amazon, Netflix and Google.
Britain’s only possible digital leader, Arm Holdings, is in limbo, owned by a feckless Japanese investor SoftBank.
Chief executive Masayoshi Son, having been prevented from selling Arm to American rival Nvidia, wants to park it on the Nasdaq market in New York rather than reshore it to Britain.
The UK is so anxious to encourage the social media behemoths to build campuses and invest in Britain that it has shied away from meaningful digital taxes.
The result is that indigenous retail businesses have vanished and veterans of the High Street, such as John Lewis, M&S and Sainsbury’s, struggle to compete.
The european Union has been fearless in challenging the social media monopolies. In spite of a great history of ‘trust-busting’, taking on the monopolies of Standard Oil of New Jersey and AT&T, successive US presidents Donald Trump and Joe Biden have so far done little to ease the anti-competitive grip of the digital giants on society.
Only Netflix, which has encountered free market competition from the likes of Disney and Paramount, finds itself under real commercial pressure.
The main trust-buster now is the eU’s competition commissioner Margrethe Vestager. She challenged Apple over its anti-competitive tax practices in Ireland, collecting a £13bn fine. This week Brussels won a famous victory over Google over the way it restricts access to Android devices.
This has helped it become the dominant search engine by blocking out most potential competitors. The eU won support from a european court, which imposed a £3.5bn fine. All of this bodes well for the eU’s Digital Markets Act, which aims to challenge the dominance of Silicon Valley.
The law should make it easier for users to switch to rivals, remove and replace apps, change default settings, and unsubscribe from core services. Smaller challengers should find it easier to operate on the dominant players platforms.
Britain’s digital markets bill, outlined in the Johnson government’s ‘Queen’s Speech’ in May, was part of a UK effort to empower our own competition authorities to check the power of the digital giants.
It has been a slow-burning victim of Tory in-fighting and the focus of policy-makers on the energy policy and the cost of living.
Britain is in danger of being left in an eU slipstream which could harm consumer choice and damage burgeoning tech start-ups.
Paper tigers
THe pretence of the banks that branch closures and driving customers online are for their benefit needs to be questioned.
NatWest’s online platform at present makes it impossible to look at recent transactions or pay any bill before being confronted with a page that demands the user affirm that they still want to receive paper statements. Santander is writing to its customers saying: ‘We will be emailing you soon to let you know that we are converting any current accounts and savings accounts you hold to paper- free’ – worded as a huge favour.
The emails, when they arrive, come with a ‘no reply’ warning so the customer is given no obvious opportunity of opting out. In an age of scammers and bank fraud, the idea that all communications from Santander will only be ‘digital’ is unconscionable.
Any effort to cloak going paperless moves as an environmental initiative must be regarded as greenwashing. The beneficiaries are Santander shareholders, mainly in Spain, and executives boosting bonuses.
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Tokyo story
JAPAN is rarely a first mover when it comes to global finance.
So the decision of the Bank of Japan to conduct a ‘rate check’ – a sign it may intervene to try to reverse a dive against the dollar to its lowest level in 24 years – must be taken seriously.
The move comes ahead of next month’s gathering of finance ministers of the G7, G20 and International Monetary Fund in Washington, where energy costs, inflation and the upward surge in the dollar look certain to dominate. Bring it on.