[Opinion] Why are Google’s consultants advising on EU monopoly policy?

Now the fee has outsourced growing its merger coverage to none aside from a consultancy that helps Google push by means of mergers and acquisitions. It appears the European Commission hasn’t discovered from its previous scandals so it is excessive time for MEPs to behave to cease this downside.

In 2021 the European Commission employed the economic consultancy firm RBB Economics to judge certainly one of its merger management instruments. RBB Economics is not a family identify, however its function in merger controls can’t be underestimated. The firm works for among the largest firms on the earth to push by means of mergers and acquisitions and has a long-standing relationship with Google and several other different tech firms. It has performed a job as a guide for giant firms in many of the current massive and controversial merger circumstances dealt with by EU competitors authorities.

Moreover, RBB Economics has for years lobbied in favour of weak enforcement of the EU’s merger guidelines, and towards key provisions of the Digital Markets Act which goals to rein in Big Tech’s monopoly energy.

In May 2021 a associate at RBB economics said in a panel discussion organised with Apple that in “[digital] markets focus is pure” and that tech monopolies must be rewarded for his or her ‘dangerous investments’ with “monopoly rents”.

Almost no EU mergers blocked

The European Commission’s analysis of its merger guidelines comes at an important second. Decades of lax merger enforcement insurance policies have led to ever extra market focus. Studies have proven that excessive market focus results in increased income inequality, weakened labour rights, higher prices for consumers, and undermines democracy.

In no different sector is that this extra apparent than tech. Apple, Microsoft, Alphabet and Amazon are four of the top five largest companies on the earth by market capitalisation.

Big Tech has used its dominance to accumulate any potential rivals which may threaten this standing. Meanwhile regulators have barely intervened to dam any of its mergers.

European Commission figures present that between 1990 and 2021 solely 30 out of 8083 notified mergers have been blocked by the EU, a mere 0.37 per cent. A study for Corporate Europe Observatory exhibits that the fee accepted 9 out of 10 notified mergers with none situations.

However, with the not too long ago accepted Digital Markets Act (DMA) Big Tech market energy has come underneath elevated public and regulatory scrutiny in Europe. Additionally, in 2021 the Commission began a broad evaluate of its competitors coverage, partly to sort out the hurt attributable to digital monopolies.

In a context the place market focus and monopoly energy are lastly being questioned by regulators, it’s particularly alarming that an necessary a part of that agenda is being outsourced to a consultancy firm with an extended monitor report of defending firms with monopoly pursuits.

Normalising conflicts of curiosity

The European Commission has earlier kind in hiring consultancy companies to undertake investigations and evaluation in a coverage space the place these consultancies have a monetary curiosity.

In 2020 this induced a significant scandal when the fee determined to rent the asset supervisor BlackRock — maybe the world’s premium fossil gasoline investor — to analyze learn how to make banking extra sustainable. More than 30 MEPs signed a protest letter, and a few joined a coalition of NGOs who complained to the European Ombudsman.

The ombudsman’s ensuing determination was remarkably sturdy, calling for an overhaul of the foundations. While the fee did observe up by drafting a number of amendments to the Financial Regulation, our analysis exhibits that it has not made any try to strengthen its personal inside procedures on hiring consultants with conflicts of curiosity. This explains how RBB Economics might be handed a contract that permits them to realize one other foothold in EU competitors coverage.

To have any credibility going ahead the fee should finish its custom of hiring consultants with a robust vested curiosity, and chart a distinct path in its strategy to mergers. And MEPs ought to demand that the Commission introduces a real test on conflicts of curiosity earlier than awarding contracts on politically necessary consultancy work.

Most considerably, the European Parliament is negotiating a reform of the Financial Regulation which presents a novel alternative to make sure that consultancy companies with a vested curiosity are as soon as and for all excluded from public tenders. Let’s not squander this second.