BIZCOMMENT
Wednesday August 21, 2019 B7US antitrust review may redefi ne internet pattern
Germany could kill a few birds with one green bond, which makes economic sense
Germany could kill several birds by is-
suing one green bond. Raising money
solely to manage a shift away from fos-
sil fuels would underscore Berlin’s focus
on making the transition. It would also
give eco-friendly fi nance a crucial politi-
cal boost. And it makes economic sense.
Chancellor Angela Merkel’s coalition
government wants Germany to stop us-
ing coal power by 2038, but knows the
transition will have an outsized econom-
ic and social impact on certain parts of
the economy and the country. It there-
fore plans to channel money to aff ected
regions to help them manage the transi-
tion.
Some of the projects could be fi -
nanced by issuing a green bond. Pur-
ists will quibble this is a misnomer
if any of the money raised were to be
spent on shifting away from fossil fuels
rather than truly green projects. But a
June report prepared for the European
Commission by technical experts rec-
ommended sustainable fi nance clas-
sifi cation systems include economic
sectors that are not already low carbon
to provide an incentive to help mitigate
climate change.
Germany wouldn’t be the fi rst sov-
ereign with a triple-A credit rating to is-
sue a green bond: the Netherlands has
already. But a sale by Europe’s largest
economy would be a much bigger deal.
It would show Berlin was serious about
the shift away from coal and help pro-mote green fi nance, which is already
attracting major interest from issuers
and investors. And ideally, Merkel’s gov-
ernment would exclude green spending
from the self-imposed national goal of
balancing the budget. In theory, that’s
unnecessary. The European Commis-
sion expects Germany’s budget surplus
to be 1 percent of GDP this year and 0.8
percent of GDP next year. But some of
that buff er is already earmarked for
hard-to-reverse purposes such as school
renovation, more social housing, and
speedier internet infrastructure.
The catch is this would push up
debt, and Germany’s constitution limits
the amount of spending that can be fi -
nanced with new issuance. But there isa degree of fl exibility which should be
fully used. After all, the European Com-
mission forecasts German public debt
will fall to 58.4 percent of GDP this year
and decline further next year. Spending
more to secure an environment-friendly
future makes even more sense for an
economy that is at grave risk of tipping
into recession in the present.The author is Swaha Pattanaik, a Reuters
Breakingviews columnist. The article was
fi rst published on Reuters Breakingviews.
[email protected]Page Editor:
[email protected]By Fang Xingdong
T
he US Department of
Justice recently an-
nounced that it has offi -
cially launched a wide-ranging
antitrust review into several
internet giants. The investiga-
tion will look into how those
market-leading online plat-
forms achieved their market
power and whether or not they
were “engaging in practices
that have reduced competition,
stifl ed innovation or otherwise
harmed consumers.” The
review will also consider the
“widespread concerns” that
consumers, businesses and
entrepreneurs have expressed
about internet search engines,
social media, and some retail
services online. Seemingly,
this will be the most infl uential
event in the last 30 years of the
internet business.
The last large-scale antitrust
movement was the anti-mo-
nopoly lawsuit launched by US
authorities against Microsoft.
The focus of the antitrust
review this time around will
likely include Google, Amazon
and Facebook. It is no exag-
geration, therefore, to say that
the US government will likely
redefi ne industrial patterns for
the next 10 to 20 years with
this move.
Over the past fi ve years, it
was not uncommon to see anti-
monopoly cases in the global
internet industry. For instance,
European regulators succes-
sively slapped Apple, Facebook,
Google, Amazon, and other
tech companies with big fi nes.
But the US’ move this time
may mark the start of stricter
antitrust punishments in the
global internet industry. In
addition to penalties for abuse,
as well as restrictions on gi-
ants’ acquisitions and merg-
ers, the US government may
implement its most stringentmeasure – to break up the tech
giants. Moreover, since this an-
titrust review is a wide-ranging
one, its impact is likely to be
seen beyond the industry.
There have been three
rounds of anti-monopoly
probes in the history of the
global high-tech sector, with
each targeting a tech giant.
The fi rst was the anti-
monopoly investigation into
AT&T in the middle of the
20th century, which eventually
forced AT&T to grant Ameri-
can companies royalty-free
licenses on any patent from
Bell Labs (transistors, lasers,
cellular systems, satellites,
solar cells, and other patents).
Then, these technologies
directly contributed to the birth
and rise of the Silicon Valley,
which led to the emergence of
many large companies such
as Fairchild Semiconductor,
Motorola, Texas Instruments,
Intel and AMD.The second anti-monopoly
wave in the 1970s focused on
IBM, which was the undisput-
ed leader in the computer fi eld.
IBM fi nally agreed to abandon
the integration of its hardware
and software businesses, allow-
ing other companies to develop
software for their computers.
Without this anti-monopoly
review, the rise of companies
like Microsoft would never
have occurred.
The third wave of antitrust
reviews was mainly aimed at
the software giant Microsoft
in the late 1990s. Although
a drawn-out appeal fi nally
overturned the court’s origi-
nal decision to split Micro-
soft, companies like Google,
Amazon and Facebook would
not be able to stand out today
without the antitrust lawsuit of
the century.
This time around, the
antitrust review is not just tar-
geting the monopoly issues of
Google, Amazon and
Facebook in the search
engine, e-commerce
and social media
fi elds. It also includes
Apple’s closed mobile
operating system
and application store,
Qualcomm’s mobile
phone chip patents,
and Microsoft’s still-
unbreakable monopoly
on operation systems.
Most of these tech
giants have seen their
market capitalizations
reach trillions of dol-
lars, which has had an
unprecedented impact
on both business
development and the
capital market.
Unlike the fi erce
debates between sup-
porters and opponents
in the past, public
opinion has been
relatively consistent
toward this round ofantitrust reviews. With the
exception of the giants them-
selves, industry insiders, aca-
demic circles, the government
and the public have reached an
overwhelming consensus to
call for strong measures from
the US government.
At present, market concen-
tration in China’s internet sec-
tor is not low compared with
that of the US, and the abuse
of monopoly is also quite com-
mon, involving quite a number
of fi elds. In addition to the
similar monopoly situation
as the US, some behemoths
have even taken advantage
of their platforms to quickly
expand into the fi nancial,
media, education, and security
fi elds. Yet, thus far, antitrust
eff orts in the internet sector
remain lacking in China. One
of the major reasons for this
lies in industry policymakers’
inherent misunderstanding,
believing that anti-monopoly
moves are in opposition to
growth and expansion. In fact,
history proves that by address-
ing low-effi ciency competi-
tion, anti-monopoly action is
actually a fundamental tool to
increase development, strength
and innovation.
Over the past half century,
each of the anti-monopoly
actions in the US high-tech
industry succeeded in stimulat-
ing the vitality of competition
and expanding a new indus-
trial structure.
China’s internet and
high-tech sectors have not yet
undergone a real wave of such
an action. The Chinese high-
tech sector is strongly urged to
leave its erroneous zone and
go through the test of anti-
monopoly action.The author is director of the
Center of Internet and Society
at Communication University
of Zhejiang. bizopinion@
globaltimes.com.cnIllustration: Luo Xuan/GT