Workers of the World Unite!

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As she often does, Merryn Somerset Webb recently gave us some wise words, about dominant companies around the world (Financial Times 18th May 2019, and ). Quoting a Barclays study from the US, Merryn noted the more powerful firms are the less they pay, the less they invest and the less dynamic and innovative they appear to become. That’s bad news, not least for current and future workers at these firms. Over the past decade some of the world’s biggest companies have effectively become labour monopsonies – setting the market levels for pay, and setting them low.


But better news could be emerging. The superstar firms of the last few decades might soon get the beginnings of their comeuppance. Why? In a number of countries there is talk of increasing the scrutiny of mergers and acquisitions, and introducing better laws to try and prevent anti-competitive behaviour. Regulation around data and infrastructure sharing (including forcing big firms to share the resources that keep them dominant) is being considered. So is a rise in taxation, in an attempt to remove from big firms the outsize profits they make from the monopsonies.


For workers, particularly young people entering the jobs market for the first time, this is all very welcome. Their future opportunities to contribute to the sort of economic growth they want (sustainable, equitable, inclusive) may be, with a little assistance from regulators and governments, in new competitors. Big may no longer be beautiful. Instead, young workers might now be attracted to dynamic disruptive small-to medium-sized companies that have a chance of challenging the large ones. These organisations will probably have a more instinctive view of what sustainable future growth looks like, including:

  • Policies that empower women (such as maternity leave)
  • Internships or hands-on training in new skills (including AI, data engineering, wireless technologies, responsible environmental management, software applications for education and medicine)
  • Collaboration with schools, colleges and universities – pushing academics to acquire the practical solution-building knowledge they need to better teach new skills
  • A focus, encouraged by government, on export of both goods and services to the wider world
  • Controls to make sure intellectual property and brand value stays in-house (and isn’t sold off to large companies or business tycoons)
  • An acknowledgement that upskilling new workers, and developing new markets, demands patience and a fair playing field.

There are a number of positive signs.

The European Commission’s antitrust regulator has recently launched a formal probe into Amazon. The giant online firm is accused of misusing sensitive data from independent retailers (often small and medium-sized) who sell on its marketplace. Margrethe Vestager, the EU’s competition commissioner, will investigate whether Amazon has used the data to give it an unfair market advantage as both a retailer and a marketplace.

In India, a May 2019 Reuters report revealed the antitrust regulator is looking into allegations that Maruti Suzuki, the country’s biggest car maker, resorted to anti-competitive practices by controlling how dealers discounted cars. Maruti, majority-owned by Japan’s Suzuki motor Corp, commands a 51 per cent market share in India, selling 1.73 million passenger vehicles in the year to March 2019. It has nearly 3,000 dealers across the country. The Competition Commissioner of India is looking into allegations that Maruti forces them to limit the discounts they offer, effectively stifling competition and harming consumers (as well as putting off potential new workers looking for a sustainable future).

Less than a year ago, the UK’s Office of Communications fined Royal Mail a whopping £50,000,000 for a serious breach of competition law, after the company abused its dominant position by discriminating against its only major competitor (Whistl). By raising wholesale prices for delivering business letters (known as bulk mail) Royal Mail’s actions amounted to anti-competitive discrimination against customers like Whistl looking to expand and compete directly against it. Ofcom said: Royal Mail broke the law by abusing its dominant position in bulk mail delivery. All companies must play by the rules. Royal Mail’s behaviour was unacceptable, and it denied postal users the potential benefits that come from effective competition.

Merryn Somerset Webb believes that ten years ago investors might have been smart to buy into the big brands (she includes Coca-Cola, PepsiCo, Mondelez International, McDonald’s, Nestle and Suntory, and her Barclays reference mentions Alphabet, Amazon, Facebook, Apple, Microsoft, Ford and Johnson & Johnson). It’s not much of a stretch to apply her logic to young workers seeking out the sustainable jobs of the future. Today, they should look for those small but beautiful firms that, with a little regulatory assistance, will be their new competitors.