 Okey. Thx e edges ran hafa gwein saved in the room on, and also online. We are going to be here for about half an hour having an informal discussion on the theme of can we live with monopolies. We are going to have a chat here for about twenty minutes and then we'll open it up to any questions from the floor. I am here with Phil Jennings, who is general secretary of UNI Global Union and who looks after, represents workers in the services sector. Ieithaf yw David Autor, yw'r Ffordd Professor i'r Economix yw MIT. Felly, roi'n gweithio, rydyn ni'n gwybod i ddech chi'n ddigtech. Mae'r ddweud yn ymddangosol, mae'n ddweud o gwybodio bod o'r ffordd o'r ffordd o'r ffordd o'r ffordd o'r ffordd, mae'n gweithio i'r Cyllidol Cymru. Roi'r ddweud o gwybodio i ddigtech sydd o ffordd a oed. A'r gwybodio'r ddweud yn ymddangosol o ddweud o gwybodio i ddweud o gwybodio. Roedd yn ddweud o ddweud o ddweud o gwybodio o ddweud o gwybodio i ddweud o'r ffordd o'r ffordd. Roedd yma yn ymddangosol, mae David mewn gwahanol. Roedd yma yn cyfreithio. Mae cyfreithio eich cyfrifetau a'r cyfnod yn cyflodol yw'r prodwynt. Roedd yma yn cyfrifetau a'r cyfrifetau, a'r cyndoedd ddodion adeghau y bydd ar hyn o'r cyfrifeniad hynny a hwn yn cyd- twent yn fathodaeth o'r cyfrifeniad a'r cyfoedd yn cwm yw'r wneud o'r bod postennan ar hynny i'w cyfrifeniad hefyd am gyllideb ond hefyd yn bach gan hynny ar gweithgafol a'r cyfrifeniad ar y ddechrau oedd yn cael grŷn yn cyfrifeniad yn gweithfiau. A'r cyfrifeniad can gofyn, fath o'r cyfrifeniad, yn yr amddencech yn ddweud mleid i'n gweithio many of employers may control so many of the workers in the given occupation that they don't face much competition from other employers. I think we should at least as concerned about what's called monopsyny, or market power and the labor market, as we shouldn't be about market power in the product market. Thank you, Ed, we'll definitely be returning to the idea of how you define a monopoly and what the precedent's in history. Turning to Phil, you can see monopolies' bad news for economies because they distort the market. Yn gyffredinol na gwrs normal? Yn cael ei bod yn gyfnodol yn ei wneud o'r cyfrydd cyllid yn ymryd ynghori. Mae'r rhai sydd yn cynghori i'r blod? Rydych yn fwyaf i gyd, mae'n fwyaf i'r fwyaf i'r bwysig? Mae'n gyfnodol yn ymryd â bod yn ymryd yn ymryd yn y cyfrifol, ond yn y cyfrifol hwyloeddau, ond yn ymryd, mae'n gwybod i'r bwysig. Yn ymryd yn ymryd, mae'r bwysig yn ymryd. A oeddwn i'r bifyglwydig, rydyn ni'r bwrw sy'n gyfwyrdol a 46% o gwaith o online cyfle i Google. 90% o'r ffordd o'r cyflog? Beth o Amazon? 90% o'r ffordd o'r cyflog o Google. A oedd yn Facebook, mae'n iawn i'r Facebook planetol, o ddwyliadau 3 billion o'r online. Gwydden nhw'n gweithio'r hwnnw o'r gwleidio. Gwydden nhw'n gweithio'r honno'r cyflogio'r cyflogio, rydyn ni'n gweithio'r cyflogio'r hwnnw o'r gwleidio'r cyflogio'r amser hynny wedi'u gweithio'n gweld, mae'n ddylch gyda'r cyllidol o'r ffrindigol. Nid ydych chi'n gweithio'n gweld ac mae'n gweld. Mae hynny'n gweithio hynny yn ystod, yn ymweld y cyfan, mae'n gweithio'n ddweud a'n dweud a'n ddweud eich gweithio'n ddweud o wneud y Plutocrats yn ystod a oedd ymgylcheddau ydy o'r cyffredinol yng Nghymru? Yn y gweithio, mae'n gweithio'n gweithio. John Sherman, the Sherman Antitrust Act said, if we will not endure a king as political power, we should not endure a king over the production, transportation, and sale of any necessities of life. Adam Smith in the Wealth of Nations said something similar. Why does this particular form of monopoly, as we see it, worry us? We have to think of the digital world in terms of digital conglomerates. We have a time of digital feudalism. This means the power that they have is enormous and has ripples and implications in all ways in terms of the price that people pay for a product, in terms of wages, in terms of inequality, and in terms of power. And therefore, they are concerns which we have dealt with in the past. But what is new about this in this new age of digital conglomeration it is now clear that these tools not only can direct us in terms of the products that we buy, but they begin to have an impact on the way that we think, on the way that we respond, the way that we receive and interpret the news, and all of a sudden you see an all-embracing monopolistic power, if you like, which goes beyond the material into the non-material world in terms of our behaviour and in terms of our attitude. Now, I can give you the nuts and bolts of what it means to us when Walmart comes to town. When Walmart comes to town, local competition is hammered. It has a depressing impact on competition, squeezes out the smaller medium-sized enterprises, and has a major impact on the price of labour as well. We have seen in Silicon Valley the use of this power when their cartel on engineering salaries was bust some time ago, which apparently cost millions, the figures are clear, that cost hundreds of millions in terms of lost earnings. So what can I say, from where I am, I'm not a lawyer, I am not a competition expert, but we are worried about the new power that we have. We must talk in terms of digital capitalism, digital conglomerate, a kind of digital feudalism which goes beyond the material into how we interact as humans, how we form opinions, how we engage with a political process, and our sense is this has gone too far. Has it gone too far? How much power is too much power? First of all, that was a terrific speech, so hats off. I don't want to try from it all. So let me say, I think it's worth asking where this is coming from. When we say, is it going too far? Well, how did we get here? And I think it's plausible that a lot of the growth of market power that we have seen recently, and I agree that we see a lot of growth of market power, is not because of abuses or anti-competitive behaviour per se. That doesn't mean it has all good consequences, but a lot of it has to do with the changing nature of competition. We are increasingly in an era of what some of my fellow conglomerates and I call winner-take-most markets. Markets where small competitive advantages can mean enormous differences in market share. In a world where there's, you know, search frictions are high, information is low, lots of firms of different quality and price can coexist. In a sort of an Amazon online search world where everybody goes relentlessly for the lowest price, it's actually feasible for the company that has the best logistics system to gather huge amounts of market share. In products like search or in social media, there's also what we call network externalities that people want to be on Facebook because other people want to be on Facebook and other people are there because of that. And so these things may be growing organically as a result of the change in the nature of competition. That doesn't mean that that's a good thing or just because it happened naturally, you know, we shouldn't worry about it, that's not my argument, but I think we need to understand where it's coming from. Has it gone too far? Okay, let me turn it back to you. I'm just interested, just from what you were saying about historical precedents, is what we're seeing now totally unprecedented, this convergence of data in the internet and technology, or if we look back at previous industrial revolutions, have we seen it all before? Are there lessons from the past? There are lessons and Phil alluded to this during the kind of gilded age we did have these monopolies on the railroads and oil and we broke them up and they were certainly subject to abuse. And our current regulatory framework isn't very well set up for dealing with the so-called digital monopolies because it's not obvious they're abusing their market power at present. They may very well, but they do have a lot of power. And so our regulatory structure may not be set up to recognize the challenges that they pose. I mean, the US has historically stepped in, in the case of AT&T, broke up AT&T, it gave Microsoft a hard time for a while. I'm not clear if that had a big effect, but Microsoft's certainly not the competitor it used to be. One thing that bear in mind is sometimes companies that appear indomitable actually fade pretty fast. So IBM, people used to talk about IBM, then they talked about Microsoft, and now these companies are not where they once were. Walmart was considered indomitable 15 years ago. Now it faces an enormous competition from Amazon. Or do you remember Frenster or Myspace? Kind of sucked up. I would guess that Facebook will be almost non-existent 20 years from now. Probably I'm wrong about that, and now you have it on record, but I know I don't use it. I think that's the beginning of the trend. I think this question of abuse is important. And I think the regulatory authorities, there's a kind of a ripple around the world in regulation that things seem to have gone too far. And they're certainly attracting the attention of regulators as to what the economic and competitive impacts are and where the competition is really taking place, as they say, on the merits. In terms of the abuses that we've seen, it's not just by chance that Google was fined 2.9 billion euros by the European Commission. And it wasn't just by chance that Apple was fined something approaching $13 billion because of their tax evasion policies. Now I would say that is an abusive market power. It's a lack of ethical principles in the operation of the organization. And it's a sign that when you have this much power, the latency for abuse is a real one. And FDR, he said, the great depression was caused by the economic tyranny of monopolization. Now I like this flow of words. And therefore, then perhaps we've been given this large, the big three, a bit of a free pass in terms of what are the ramifications of the things that they do. And I feel that there's this idea that there's this natural, organic kind of growth to the organization. They are grown by acquisition. They're buying one company a week, sometimes four companies a week. And therefore, because they have the money and the financial power to do it. The other side of this is one of the great fractures that this World Economic Forum is talking about is the fracture in inequality of power, inequality of wealth, and inequality of income distribution. When you have the financial wealth funneling up to a small community of people, then this will aggravate the fractures and make it more difficult to deal with the income and wealth distribution problems that we have. Let me focus on the part of what you said that I agree with, which is the labor market side. I share your concern that the concentration, I'm not so worried about concentration in search frankly, but I am worried about concentration in labor markets where workers don't face effective outside competition for their labor. And you can see that you don't have to look to Google. In the United States, fast food franchisees have non-compete agreements with one another where they won't hire workers who have worked at the McDonald's down the block. Now McDonald's has actually subsequently changed its policy now that it's been exposed, but that notion of labor tying when you don't have effective competition for workers, and much more, I mean, you mentioned the sort of collusion in Silicon Valley, that's an abuse, but I'm much more concerned about abuse of minimum wage workers or people who really have trouble fending for themselves in the labor market. So that idea that workers have very few options is even more consequential, in my view, than that consumers have few options in these areas. I think in many cases these, what Google has done, what Amazon has done with this video, there's a lot of great free services, they've lowered prices, they've made life more convenient. However, to the degree that they, this has the effect of store shutdown, they don't compete for workers, tech engineers have few options if they aren't however Google, that's the side of it that I'm particularly concerned about. The bottom line for us in the world of labor as well is the ability for us to organise these workers, to negotiate for these workers and try to give them a decent contract. There's been a wave of industrial action in Amazon for the people working in their so-called fulfilment centres. When you say so-called, are you suggesting they're unfulfillment? So-called, so-called. And the reality is that Amazon and their top leadership are implacably opposed to the union organisation of their members and therefore the workers are taking their destiny into their own hands. Now we have some works councils emerging, but before Christmas there were a wave of industrial action because Amazon will not respect the basic human rights of their workers to organise. Now in Facebook we had similar issues years past, but now we begin to see a change in their line where they will work with the local labour movement. A sign of a non-abusive power would be an engagement with the labour movement to get into a serious conversation about the human rights of workers, the trade union rights of workers and the wages that they are paid. Yeah, I don't disagree with that. I think we're on the same side of the page here on the labour market side. Our diagnosis of the extent of abuse may differ, but the concerns are shared. What can we actually do to prevent abuses, whether they are of workers or of markets? We live in a borderless online age. The models that we used to apply are just very difficult. Practically, what can be done? How do you regulate the big tech companies? I think there are questions to be asked. That are global? The questions really are to be asked. How adequate is the current regulatory framework to deal with this new concentration, this massing of economic power? And I think there's a number of questions or a number of approaches. How do you stop the monopoly before it happens, i.e., monopoly which is made by acquisition? We've seen in each of the cases of the big three, Google, Facebook and Amazon, a growth of market power through acquisition. So do you stop this before it happens? Another one is do you build structural barriers to monopoly in certain industries? So, too, we had the Glass Eagle Act, the culmination of which was a massive financial crisis 30 years down the track. What could be done in terms of building structural barriers? And in the world of online ad companies, you own the channel and you use that channel to compete against the people using the channel. And then do you split up or neutralise the power of corporations that have the ability to dominate and to control entire realms of commerce? And so, I think there are things that can be done that regulators have in their locker to do something about this, but at the end of the day, the platforms, these organisations have to take responsibility for what they do. They try to wash their hands of responsibility in terms of media and fake news and all the rest of it. And when two thirds of the population have access to news through the social media, this raises questions about our democracies as well. And I hope that this will lead to new reflections about what this means to have such concentration of power and that can have such a manipulative power on the way people think and act. At the last, I would say, pay your taxes and also respect the human rights of people. And then, if you don't, you shouldn't be granted the social licence to operate. David, most countries have laws to prevent monopolies. What's going wrong? Is something going wrong? No, I don't think primarily this is a regulatory failure. Many of these are new developments. And I also don't think the abuse of these so-called monopolies on the market, on the consumer-facing side, is that extreme. I'm much more concerned with Phil on the worker side and the ability to negotiate competitive contracts for workers and make sure the gains are shared. I think some countries do that much better than others. I think some countries have much more encompassing regulatory frameworks for worker protection and better bargaining between and representation of labor in management than on corporate boards. I think that in the long run, that model will work better. I think the US model where workers are not considered a stakeholder, just shareholders are considered a stakeholder, has created a level of inequality and social disaffection that has led to kind of political upheaval, which I do not think is necessarily the interest of the money corporations. Perhaps it is, perhaps it isn't, we'll see. So I think that is the greater concern. I don't think the fact that we're living in a globalized world means we don't have national self-determination on those matters. Countries can decide what are their basic social protections, what are the minimum wages, what are the benefits that are guaranteed, what type of bargaining rights. So I don't think that we have to cede that to the notion that we no longer, that's no longer within our borders. I don't think that's, I think we should give ourselves credit and opportunity. And what about from both of you, what about the bright side of these platforms in some ways bigger can be better? They make the world smaller, they empower people in many ways, they make life easier, more efficient, they make products cheaper. The CEO of Google has said that he sees AI as a big stride for humanity akin to electricity or fire. It could be the leap forward that helps us to tackle climate change or find cures for cancer. There's a lot of utopianism out there. How do we get the balance right between... As I emphasized earlier, we've gotten lots of benefits from these platforms. Amazon has made the world a cheaper place, Google has made it more convenient and Facebook has made it more social. In the long run, AI will clearly enhance productivity. The challenge is one of distribution, not of growth. We are going to get wealthier. The question is whether we turn that into shared prosperity or pure plutocracy. That is an institutional choice. It's not determined fundamentally by markets or by technologies, it's determined by societies. We can look around and see equally countries with similar material resources and very different outcomes compared Norway and Saudi Arabia, right? Two oil rich nations, right? One of which is a very mobile, satisfied place, economically mobile, lots of public investment, high rates of labour force participation, extremely democratic. Another of which is an absolute monarchy and does have high standards of living but forts many other human strivings. The difference between them is not their technologies, not the market, it's their institutions. So these are institutional choices and we sell ourselves short and foreclose opportunities by thinking we don't have control over this. We get to decide. Phil, how concerned are you about the impact of trends like automation and the rise of AI? Well, first of all, I think there's a concern about what this means for the labour market in the bigger picture. We have 3 billion people in the world's labour market. Half of them are already in what we call vulnerable work. One in three of them is surviving on just a couple of bucks a day. When we look at the inequality in terms of wealth and income, frankly, the share of the wealth produced which goes to the working population is in very rapid decline. And in fact, we are seeing levels of inequality in the distribution of income that we have not seen since Woodrow Wilson and John Sherman and others were talking about the power of the plutocrats. And we are worried that when you have three companies which amass this wealth and power, that this can only aggravate the inequality equation. It was something that Thomas Piketty missed about how the structure of economic power has an impact on inequality. And we're also asking the question about what is the price to pay. So I've recently watched the Black Mirror Netflix series and I'm not sure how many of you in the room have seen the Black Mirror Netflix series, but all this dystopian vision of artificial intelligence is actually coming through before our eyes. And when you look at the evolution of artificial intelligence and the absence of any form of proper regulation or convention, we're worried about the transparency of these things. We're concerned about the lack of ethical guidelines. We would like to see an ethical black box. We would like to insist that humans have some control, that there is some human mediation here. We're in a new realm of human experience and that's why I draw attention to this business. This is not about fixing the price of a product or fixing the price of labour. This is a massive, also one can say, manipulation of how we think, how we perceive, how we see, how we vote, how we interpret on a scale which we have never seen. Now I know it sounds like a potential script for Charlie Brooker in the Black Mirror. I know, but at the end of the day, you can see these things coming alive and you will see, I think we will have a reaction and that there will be this demand for humans in control, for ethical black boxes, and for us as a community to say, what kind of world do we want to see here? And is that the world, this dystopian world, where we have three companies who have all the authority and the power? That's not the world that we would like to see. Predictions of the future are notoriously difficult and I think Charlie Brooker's got the right idea with fictionalising it. However, I'm going to be a little harsher on our panellists. Do you think we're at a turning point where we're going to ask these big questions, get the framework right, and move forward in the right direction? Or do you think that we're going to see the kind of crisis that you've been speaking of from history? No, I'm not nearly a pessimistic as well. I think that we have both opportunities and challenges. They always come hand in hand. The fact is these technologies open vistas of possibility, of advances in science, but also of shared prosperity. In fact, do you think of the way mobile technology has been so critical to developing world, allowing for communication, for agriculture, for prices, for competition? I think there are real risks and real concerns, but it always takes us time to catch up with the challenges that we create for ourselves through these innovations. We could have had a similarly dystopian view at the dawn of a nuclear age. We could have said the same about AT&T and IBM and their cartilisation of the planet and so on. These are real challenges, but I don't think we're incapable of overcoming them, and we shouldn't look at them purely from the perspective of they're all negative. It's like this is not global warming, something we'd rather have, but just have to deal with. We want these advances. We want these technologies. They're going to improve our productivity, allow us hopefully to share resources better and certainly make our lives more interesting. We just need to figure out how to make sure that that opportunity is not squandered. It's quite possible to squandre it. It won't take care of itself, but it's not a foregone conclusion that will blow it. I've got one last question to fail on that note before we open it up to questions on the floor. Can I just say, do I feel that this is a turning point in the evolution of the capitalist system? Yes. A further evolution in terms of the digital change before us, most definitely. According to the atomic scientists, the nuclear clock is at two minutes to midnight, whereas a decade ago it was nine minutes to midnight. For us it feels like two minutes to midnight. So I do feel it's a turning point. And what I would say is if we continue as business as usual, then the outcomes make us feel very skeptical. However, if we can turn the axe towards a policy of more inclusive growth, of a new sense of purpose for business, I liked that Larry Fink the other day turned around and said, we're going to invest in businesses which have a sense of purpose, a social purpose in all its dimensions. The forum is trying hard in their risk report to show and the report they've done on inclusive growth and what does it take. Then that makes me more optimistic. In terms of the bigger picture, the statistics would indicate that we're going through a massive labour market transformation. Occupations and tasks will change. My question is, how prepared are we? How prepared are we to accompany people through this transformation? The market cannot solve this. It needs new values, a new sense of community, a new sense of responsibility to ensure that people are prepared. And our problem is that we're not taking those measures now to ensure that somewhere over the rainbow, happy ending. Thank you, Phil. So, from the doomsday clock and black mirror to a new era of purpose and responsibility, plenty of food for thought here and I'd like to open it up for any questions. Yes. Hi, my name is Linda. I'm from the Boston Globe. You mentioned there was a comment about connecting, comparing AI to electricity. Is there any chance that these Google and these companies will be regulated like the utilities that they are becoming? There's a chance. I mean, there's certainly precedent to view them as kind of common carriers, right? That's the framework we used for, that was the framework we used to regulate telephony, as well as mail delivery. It's possible. I doubt there's much regulatory appetite for that. But it would be feasible to say, you could argue that Amazon is a common carrier, right? They're the platform on which many, all other firms will compete for retail business and Google for advertisement and so on. So it would be feasible. I think it's very unlikely to occur. And given that, one hopes that there will be other forms of organic competition that will actually undermine or at least reduce their market power. Well, you'll get, even if a company gains market power based on excellence, once it's there, it has every incentive to abuse that power, to maintain its control and also often becomes quite mediocre, which is what we've seen with many monopolies. They start off great. Eventually they make overpriced, low-quality products that we are forced to buy, regardless. So hopefully the answer will be through better competition because I doubt it will come through common carrier regulation. I think the regulatory authorities are slowly waking up to this. There seems to be precious building, practically in many corridors of power, to raise questions about what this means. And it will raise questions about the common good. It will raise questions about the digital commons. And at the end of the day, it might lead to a new reflection about what data means because we have a form of data feudalism. And I think people will wake up to the fact that the new resource, the new raw material is them, their behavior. And the way that they go about their lives becomes the treasure that the feudal digital lords currently have without question. So, therefore, there may well be another angle on this looking at them as public utilities. They are public utilities with a public responsibility. Does that mean that you put new constraints on their behavior that they have to act always in the public good? They claim that they would already, but we would question that. This is what China has done with all of these, right? They've taken over search. They've taken over social media. They've taken over price comparison. I'm not so excited about that idea. I would rather have them not be so under central government control. Thank you. I'm just aware that the clock is ticking in case there are any more questions out there. Any other questions? Professor Otter stands on how to regulate them if the proposed measures aren't what you foresee or see as likely, what would you propose to mitigate the risks of these superstar firms? Sure. So, that's a hard question, and the answer is going to differ by sector, right? So, in advertising, you can see, you know, lots of platforms have an incentive to abuse their privilege, to place their ads first, right? If you're Amazon, you have an incentive to undermine the companies they're selling on your platform. So, one can imagine moving in that direction. I don't have a more well-thought-out answer, but I think it's a challenging one, but it's not insurmountable. We have one more minute. Any quick questions? This gentleman has his hand up here. Thank you very much. My name is Paul O'Kwm. Just two very quick questions that will make them all in 50 seconds. One is, I wonder why those companies sometimes don't even want to be here. Do they feel like they don't need to be here for them to run anything? And what does that mean for us if they don't even want to be anywhere where they can hear another opinion? And then the second question is, we are working on the assumption that there are some people called regulators. But if you look at what has happened over the last five or so years, is that business interests and government interests are might. And they almost act as one. Sure, I have a good question. If I could briefly handle the first question. Rest assured, this is a topic that's being discussed this morning. I was following a session on the new digital economy with a number of tech CEOs. And you may be surprised to find that some of them sounded remarkably like you. One of them made the point that there is no business model as yet to reward people for their data. In the old day, you'd pay people if you discovered oil on their land and there's no way to monetise at the moment. Anyway, please check out the programme. I would be very happy if they paid their people already for the work that they do. If you're working in an Amazon fulfilment centre, you're not getting a fair deal. If you're working as on Amazon Turk, your average per day is around two bucks. You can't make a living from this. And therefore, I would say to Bezos and his crew, rethink your business model. When other financial players are saying a sense of purpose to your business, to give broader meaning to your business, and to respect the human rights of people, I would say to Amazon in particular, you have to change your ways and respect the people that make you, Mr Bezos, one of the wealthiest players in the world. Would you like to respond to the gentleman's second question? Well, yes, and this is the question you had also said about, you know, why do I think regulators won't do this? Well, actually, to your question, if you look at the United States, we are in the process of dismantling regulation at a phenomenal rate. We don't even agree anymore that, you know, when people give financial advice, they should give honest advice. That apparently was too much of a stretch for our regulators. So I just don't see the movement in that direction. It's not that it's infeasible. It's just, you know, that's not where the social contract seems to be heading. So I think it's a real concern. I think this, and this is the, you know, massive concentration of wealth tends to lead to massive concentration of political power. We kind of have to tend to have a $1 or one vote system. And that's a real concern. I would say that a lot of the policies that are adopted, certainly United States are very distortionary and are subsidizing capital at the expense of labor in an era when capital is already cheap and labor is facing challenges just to maintain a share. It's a constant share of national income. Thank you. Thank you very much. Thank you very much. Thanks for your questions. Thanks, everybody. Thanks, folks. Thank you.