Economist GMAT Reading Comprehension Challenge #35
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Economist Article
Table of Contents
Economist Article: “America and Europe clamp down on big tech”
Link: https://www.economist.com/leaders/2020/12/19/america-and-europe-clamp-down-on-big-tech
Paragraph Summaries
Five years ago antitrust was a backwater…
Although landmark antitrust cases have been recently brought against Google and Facebook in the US, potentially opening the door for further such cases against the big tech industry, markets in the US and European Union have reflected indifference, with market value of many Silicon Valley firms even increasing.
In America the chances of new laws being passed are low...
The American market indifference may be due to a couple of investor beliefs, including an expectation for continued Congressional gridlock, belief that politicians will support American tech firms to maintain strategic advantages over China, and because the cases that Google and Facebook broke existing laws may be tough to prove within the period of a few years.
If America’s strategy is narrow and backward-looking, the EU’s…
The EU’s strategy focuses more on regulation than on trustbusting, largely because the EU recognizes the presence of Big Tech as “systemically important” to modern society and because it is implausible that the EU would be able to break up an American tech monopoly.
On paper it is possible to pick the best…
An approach that falls somewhere between the US’s full antitrust legislation and EU’s simply accepting monopolies but regulating them seems to be ideal: governments should promote competition against large tech companies that have gained a permanent presence in modern life.
Yet transatlantic agreement is far off…
There is no international agreement on how to handle these monopolistic companies, however, and the argument can justifiably be made that competition from fellow big tech firms will be more important in government policy in setting the direction for the industry.
Primary Purpose
To discuss the role and limitations of government in addressing an increasingly challenging problem.
Main Idea
Though antitrust measures of some kind would theoretically be the ideal way to demonopolize big tech internationally, several factors make that course of action less likely in practice.
Happy Studies
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