Impact of greater market concentration.
US business concentration has risen since the 1990s, accompanied by higher profit margins, weaker investment and labour accounting for a lower share of income. Research finds that having fewer new firms entering industry is reducing business dynamism and workers’ geographic and sectoral mobility, as well as making it easier for less productive firms to stay in business. In Europe, competition policy is more vigorous and business concentration is lower -- but neither business dynamism nor productivity is notably higher than in the United States.
The benefits that the largest tech firms have produced, such as job creation and tech innovations, have muted criticism of their practices.
The giant tech firms that have branched out into other sectors will be targets for breakup and other anti-monopoly actions.
The EU is pressing for digital firms’ sales to be taxed in the country of sale; this could help EU firms compete with larger US ones.
