The United States used to have the most competitive markets in the world and stand as an example for the world to follow. Today, however, things are different, according to a French economist.
“What happened is you let a bunch of markets that used to be very competitive become more and more concentrated to the point that firms have a lot of market power and they don’t really need to lower their prices,” French economist and NYU Stern School of Business professor Thomas Philippon told FOX Business’ Maria Bartiromo.
Philippon pointed to broadband internet connection as an example of this. The average American household pays $68 per month for internet connection while the average French household pays $31, he said. These lower costs are the result of the French government granting a license to a company that wanted to break into the established oligopoly in 2011.
With this in mind, Philippon suggested opening markets to increased competition. The U.S. has to be “tougher” with the larger firms while simultaneously removing regulations that “make no sense” and prevent smaller companies from growing, he argued.
“You need some bipartisan support for antitrust,” Philippon said of the U.S.
While there may already be bipartisan support for an antitrust push against big tech, for the benefit of U.S. consumers, he argued these efforts need to turn to big-ticket items like transportation and cellphone service.
Europe was inspired to move toward more competitive markets by the example set by the U.S. 20 years ago. “That’s the irony,” Philippon said of the whole situation.