Why is a mobile plan much more expensive in the United States than in France? Because competition is less strong there, according to economist Thomas Philippon, who publishes The winners of the competition Editions du Seuil. The New York University professor investigated what he calls a “reversal of history”: the United States is no longer the kingdom of the free market, and consumers are suffering.
For a mobile plan, “if you pay here 20 euros“, explains Thomas Philippon, eco guest of franceinfo on Tuesday January 25. “For the same service, he assures, today in New York you will pay between 50 and 60 dollars“Twenty years ago, the researcher points out, “it was the other way around“: “The United States started from a very high level of competition but they let their system become encrusted, they let the monopolies develop, they stopped having an active competition policy“.
Many companies, continues Thomas Philippon, have “succeeded in lowering the competition to increase their profits”. In particular, they didexplode” their spending on lobbying politicians: “Companies pre-finance election campaigns, which then gives them access to politicians once they are elected”. They can then, according to the economist, put pressure on these policies to limit regulation.
The researcher explains that the digital giants have taken the same path: ” Apple and Google, ten years ago, did not need lobbying because everyone loved them (…) They have now understood that the tide has turned and they spend a lot on lobbying, especially today with regulations on digital that are discussed “.
While concentration developed in the United States, competition increased in Europe, in key markets such as telecoms: “Paradoxically, in most markets, we do better than the Americans“says the economist:”Consumers have more choice, lower prices, and more quality“.
Asked about the energy sector, a subject of tension, Thomas Philippon nuances: “With huge fixed costs, we can’t manage it like a free market. Either way, there will be state intervention.”