Year 2 Micro-Business Economics
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Rupert Murdoch's Sky bid challenged by Comcast

Rupert Murdoch's Sky bid challenged by Comcast | Year 2 Micro-Business Economics | Scoop.it
US TV giant Comcast makes a bid for Sky challenging an existing offer from Murdoch’s 21st Century Fox.
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RBS fined £29m for "anti-competitive" behaviour

RBS fined £29m for "anti-competitive" behaviour | Year 2 Micro-Business Economics | Scoop.it
Royal Bank of Scotland has been fined nearly £30m by the Office for Fair
Trading after admitting some of its staff gave confidential details of loans
to Barclays, engaging in what was described as "anti-competitive"
behaviour.
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Deadweight Loss, Consumer & Producer Surplus- Microeconomics 2.7 (Holiday Edition)

Welcome to ACDC Econ and my first holiday edition. In this video I explain consumer surplus, producer surplus, and deadweight loss. Make sure that you ca
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Google antitrust remedy delivers few changes for rivals

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Concessions made by Google to address EU complaints of abuse that earned the tech company a record €2.4bn antitrust fine have so far had barely any impact on its shopping search results, according to a Financial Times analysis. The case is the first of a trio of EU antitrust investigations into the search giant that have stretched over seven years and which have become an important test of the European Commission’s ability to shape the behaviour of big technology platforms. The commission decided in June that Google had allegedly abused its dominance in general search to illegally favour its own shopping service over rival comparison shopping websites. Brussels levied the fine and ordered the search giant to start treating its own service and those of rivals equally from late September.

The EU can levy an additional daily fine of up to 5 per cent of the average daily turnover of Alphabet, Google’s parent, if the company fails to comply. To meet the commission’s order, Google began allowing price comparison websites to bid for space in its prominent “shopping box” that appears at the top of the results page when a user searches for a product. The box was previously reserved for its in-house shopping service. While the concession has allowed some competitors to secure prime ad space, the frequency of successful rival bids is low. Competitors appeared in under 1 per cent of the shopping box ads that came up in more than 500 product searches run by the FT on Google’s site in six European countries.

The main beneficiary of Google’s new way of doing things is, shockingly, Google Richard Stables, Kelkoo Surprisingly, shopping comparison websites now appear more often on the first page of Google’s search results that appear below the shopping box. This outcome is unexpected because Google insisted the commission did not require changes to its search algorithm that ranks search results. In the FT tests, shopping comparison sites such as Idealo and Trovaprezzi appeared in the first page of natural search results 50 times in late October, compared with just twice in late September, in the days before Google implemented its remedy. The changes were seen primarily on the German and Italian Google sites. For this article, FT ran more than 500 searches for 35 products in local languages across six Google domains from computers located in Belgium, Germany, Italy and the UK. Some of Google’s rivals are deeply frustrated by the limited concessions made so far, which they see as a means for Google to further squeeze their margins by forcing them to compete in auctions for space in the shopping box against the US group’s own service. The remedy is not working, according to Richard Stables, chief executive of Kelkoo, a European comparison shopping website. “The main beneficiary of Google’s new way of doing things is, shockingly, Google.

They’re still popping up on 99 per cent of the shopping product searches and we’re getting very little volume,” he said. 1% Proportion of Google’s shopping box ads occupied by its competitors Google is appealing against the commission’s ruling and is confident its concessions meet the commission’s stated requirements for equal treatment. A spokesman for the company said: “Four weeks ago, we implemented a remedy to comply with the European Commission’s order. As required, comparison shopping services now have the same opportunity as Google Shopping to show shopping ads from merchants on Google’s Search results pages.”

A person familiar with the service pointed out that nearly a dozen rivals were bidding in the auctions when it launched four weeks ago and participation is growing. EU officials are monitoring the effects of Google’s remedy in a process that could take months. “It is for Google to show that they live up to the decision,” said Margrethe Vestager, the European competition commissioner. “This issue will remain on our desks for some time.” If the commission concludes the remedy is insufficient, it will launch a new investigation that could be as long as the original case. Critics argue that the case has taken too much time, tried to solve last decade’s problem and provided a remedy that misses the point. There are very few comparison shopping rivals left in Europe, according to Gary Reback, a lawyer for the complainants against Google at Carr & Farrell. “What the commission does not get is the network effect on the market — when competition is gone, it’s gone and it’s not coming back.” However, some long-time antitrust experts argue a battle with regulators eventually makes a company accept that it is dominant and has special responsibilities, altering its future behaviour — much as happened following EU cases against Microsoft and IBM. Rivals have filed claims against Google in national courts to recover compensation for the alleged abuse.
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ThyssenKrupp and Tata agree steel merger - Combination of German and Indian units will create Europe’s number two producer

ThyssenKrupp and Tata agree steel merger - Combination of German and Indian units will create Europe’s number two producer | Year 2 Micro-Business Economics | Scoop.it
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September 20, 2017 by Patrick McGee in Frankfurt and Simon Mundy in Colombo 

 Germany’s ThyssenKrupp and India’s Tata Steel have agreed to merge their European operations to create the continent’s number two steel producer after ArcelorMittal. After more than a year of talks, the two companies announced a memorandum of understanding on Wednesday morning, just weeks after Tata cleared a key obstacle by agreeing with UK regulators to hive off a pension scheme for its British business. The agreement calls for a 50-50 joint venture that would produce annual synergies of up to €600m partly through up to 4,000 job losses. The group, to be named “ThyssenKrupp Tata Steel”, will be managed via a lean holding company in the Netherlands — home to Tata’s Ijmuiden plant, regarded as one of the most efficient in Europe and long coveted by ThyssenKrupp. The Dutch site is located about 200km from ThyssenKrupp’s German steelmaking plant at Duisburg, which could serve to generate cost-savings through joint working. The two groups said that they expect to sign a formal merger at the start of 2018 for completion by the end of next year, pending regulatory approvals, after a period of due diligence to examine each other’s books. The new combined company would generate pro forma sales of €15bn, employ about 48,000 people at 34 locations and ship 21m tonnes of steel per year. Up to 2,000 jobs in administration and 2,000 in production are to be cut, shared evenly by both groups. The groups said the production network would be reviewed in 2020 “with the aim of integrating and optimising the production strategy”. Heinrich Hiesinger, ThyssenKrupp chief executive, said the merger would offer both companies a sustainable future and tackle the structural challenges facing a European steel sector suffering from overcapacity. “We will not be putting any measures into effect in the joint venture that we would not have had to adopt on our own,” Mr Hiesinger said. “On the contrary, by combining our steel activities, the burdens for each partner are lower than they would have been on a standalone basis.” Share on Twitter (opens new window) Share on Facebook (opens new window) Share this chart The steelmaking industry has been in disarray following a collapse in steel prices under a supply glut driven by a torrent of cheap Chinese exports. According to UBS, profitability per tonne among Europe’s steelmakers plunged from a peak of €215 in earnings before interest, tax, depreciation and amortisation in the third quarter of 2008, to €46/tonne in the first quarter of 2016. Earlier this year profitability was around €83/tonne. For ThyssenKrupp the deal is an opportunity to separate the volatile steel producing business from its more lucrative capital goods business, which includes making elevators, submarines and car parts. For Tata, the announcement ends the uncertainty around its UK business stirred up in March last year, when the company said it would look to dispose of the business after a string of heavy losses. That decision was taken under Cyrus Mistry, who was sacked as chairman of group holding company Tata Sons in October. His successor Natarajan Chandrasekaran said on Wednesday that Tata Sons would now look to support Tata Steel’s expansion in its home market of India. Koushik Chatterjee, Tata Steel’s executive director, said the tie-up would enable a “significant deleveraging” of Tata Steel’s balance sheet. Analysts have been supportive of a deal. At Berenberg in London, Alessandro Abate said if ThyssenKrupp can pull off the merger and become a pure industrial goods maker, it would mark “one of the most complex corporate turnrounds in the history of the EU steel sector”. For Tata, Mr Abate added, it would be a “glorious exit from likely the most painful M&A deal in the EU steel history,” a reference to its 2007 purchase of Corus — an ill-timed £6.7bn deal that propelled Tata from the world’s 56th largest steelmaker to the number six spot.
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Ikea has bought TaskRabbit

Ikea has bought TaskRabbit | Year 2 Micro-Business Economics | Scoop.it
The Swedish home goods giant is looking for some digital help from the contract labor marketplace.
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M&S annual profits fall by 64% as revamp costs bite - BBC News

M&S annual profits fall by 64% as revamp costs bite - BBC News | Year 2 Micro-Business Economics | Scoop.it
Charges for closing stores and revamping the pension scheme hit the bottom line at the retailer.
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Energy Comparison of Gas & Electricity | Broadband Deals & Mobile Phones | uSwitch.com

Energy Comparison of Gas & Electricity | Broadband Deals & Mobile Phones | uSwitch.com | Year 2 Micro-Business Economics | Scoop.it
Compare and switch gas and electricity suppliers, also compare broadband deals, mobile phone deals, car & home insurance, credit cards, boiler cover & more.
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NHS gives BBC exclusive access to A&E - BBC News

NHS gives BBC exclusive access to A&E - BBC News | Year 2 Micro-Business Economics | Scoop.it
BBC News was given exclusive, unrestricted access to A&E for one week. This is the result.
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Shocking to watch. More resources (ie money!) required urgently!!
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They Just Get Bigger: How Corporate Mergers Strangle the Economy

They Just Get Bigger: How Corporate Mergers Strangle the Economy | Year 2 Micro-Business Economics | Scoop.it
Corporate mergers kill competition and cause economic stagnation
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BBC Panorama - The Trouble With Our Trains 2016 (Railway Documentary)

Panorama - The Trouble with Our Trains An investigation into the disconnect between the government and rail industry - which maintain that Britain'
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Lots of issues with franchise system in UK rail industry
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Why the merger of Essilor and Luxottica matters - BBC News

Why the merger of Essilor and Luxottica matters - BBC News | Year 2 Micro-Business Economics | Scoop.it
Will a merger of Essilor and Luxottica be too big for the public good?
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Lots of evaluation gold here
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List of privatizations - Wikipedia

List of privatizations - Wikipedia

The Shebin spinning and weaving factory in Menoufia in the Nile Delta was on strike against/locked out by its new non-Egyptian owners in the wake of the 2011 revolution. Workers and maybe the military now in control of the state were favoring re-nationalization, according to one report.

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Plans to cap domestic energy bills 'weak and confused', says watchdog | Money | The Guardian

Plans to cap domestic energy bills 'weak and confused', says watchdog | Money | The Guardian | Year 2 Micro-Business Economics | Scoop.it
Regulatory policy committee scornful about Tory policy to end ‘rip-offs’ by power companies
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Share your insight
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Comparison sites are forcing businesses and economists to rethink price theories

Comparison sites are forcing businesses and economists to rethink price theories | Year 2 Micro-Business Economics | Scoop.it
The competition and Markets Authority (CMA) published a report about Price comparison sites at the end of last month. They seem simple enough, but these straightforward sites raise interesting issu…
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America Has a Monopoly Problem—and It’s Huge

America Has a Monopoly Problem—and It’s Huge | Year 2 Micro-Business Economics | Scoop.it
The Nobel Prize winner argues that an economy dominated by large corporations has failed the many and enriched the few.
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Bitter rivalry: conflict brews as craft beer makers take on big firms

Bitter rivalry: conflict brews as craft beer makers take on big firms | Year 2 Micro-Business Economics | Scoop.it
Many small brewers fear an existential threat from the likes of Heineken and the Budweiser owner AB InBev
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More contestable than you think.
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Four reasons why Monarch failed

Four reasons why Monarch failed | Year 2 Micro-Business Economics | Scoop.it
The airline's collapse was prompted by a combination of falling revenues and rising costs.
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Can you draw a cost/rev diagram to illustrate Monarch's problems?
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Scania fined 880m euros over price collusion

Scania fined 880m euros over price collusion | Year 2 Micro-Business Economics | Scoop.it
The VW-owned truckmaker is fined 880m euros over collusion with five other companies for 14 years.
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This is the age of the Microsoft and Amazon economy 

Dominant corporate players thrive but such efficiency has a high cost for workers
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  One of my first economics lessons contrasted perfect competition, which was judged to be a good thing, with monopoly, which was not. There are worse places to begin than by being shown the difference between championing the miracle of the free market and favouring the depredations of dominant businesses. Sample the FT’s top stories for a week You select the topic, we deliver the news. Select topic Enter email address Invalid email By signing up you confirm that you have read and agree to the terms and conditions, cookie policy and privacy policy. But monopoly power has often seemed like yesterday’s issue. Standard Oil was broken up in 1911; AT&T in 1984. To the extent that we economists worried about companies being too big, we were thinking about the systemic risks from banks that were too big to fail. But we are starting to notice again the risks not of corporate failure but of corporate success. The most obvious examples are the big digital players: Google dominates search; Facebook is the Goliath of social media; Amazon rules online retail. But, as documented in a new working paper by five economists, American business is in general becoming more concentrated. David Autor and his colleagues looked at 676 industries in the US — from cigarettes to greeting cards, musical instruments to payday lenders. They found that for the typical industry in each of six sectors — manufacturing, retail, finance, services, wholesale and utilities/transportation — the biggest companies are producing a larger share of output. For example, in the early 1980s the largest four players in any given US manufacturing industry averaged 38 per cent of sales; three decades later the figure was 43 per cent. In utilities and transportation the typical market share of the biggest four companies rose from 29 per cent to 37 per cent. In retail, overshadowed by Walmart and Amazon, the rise was dramatic: 14 per cent to 30 per cent. This is surprising. As the world economy grows, one might expect markets to become more like the perfectly competitive textbook model, not less. Deregulation should allow more competition; globalisation should expose established players to pressure from overseas; transparent prices should make it harder for fat cats to maintain their position. Why hasn’t competition chipped away at the market position of the leading companies? The simplest explanation: they are very good at what they do. Competition isn’t a threat to them. It’s an opportunity. What Professor Autor and his colleagues call “superstar firms” tend to be more efficient. They sell more at a lower cost, so they enjoy a larger profit margin. Google is the purest example: its search algorithm won market share on merit. Alternatives are easily available, but most people do not use them. But the pattern holds more broadly: superstar firms have grown not by avoiding competitors but by defeating them. This is not entirely bad news. But it’s not entirely good news, either. The superstar firm phenomenon is the best explanation we have of a little-noticed but worrisome trend: since 1980, in the US and many other advanced economies, workers have been getting a steadily smaller slice of the economic pie (the distribution of this labour income also became much more unequal during the 1980s and 1990s). Workers, from shelf-stackers to chief executives, have seen their total share of economic value-added fall from about 66 per cent to about 60 per cent in the US since 1980. This decline in “labour share” is often blamed on international trade making life harder for workers and easier for footloose capital. Prof Autor and his colleagues find little evidence for this idea. Superstar firms, instead, seem to be the cause. The story is simple. These businesses are highly productive and achieve more with less. Because of this profitability, more of the value added by the company flows to shareholders and less to workers. And what happens in these groups will tend to be reflected in the economy as a whole, because superstar firms have an increasingly important role. All this poses a headache for policymakers — assuming policymakers can pay attention to the issue for long enough. The policy response required is subtle: after all, the growth of innovative, productive companies is welcome. It’s the unintended consequences of that growth that pose problems. Those consequences are not easy to predict, but here are two possibilities. Either the US economy ends up like Amazon, or it ends up like Microsoft. The Amazon future is one of relentless competition, a paradise for consumers but a nightmare for workers, and with the ever-present risk that dominant businesses will snuff out competition as the mood takes them. The Microsoft future epitomises the economist John Hicks’s quip: “the best of all monopoly profits is a quiet life”. Microsoft in the 1990s became famous as a once-brilliant company that decided to pull up the drawbridge, locking in consumers and locking out competitors. In either scenario ordinary people lose out, unless they can enjoy returns from capital as well as returns from working. In the very long run a superstar economy could become a technological utopia, where nobody needs to work for a living. That would require quite a realignment in our economic system; I wouldn’t bet on such an outcome happening by chance. tim.harford@ft.com
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Just Eat and Hungryhouse merger faces competition probe - BBC News

Just Eat and Hungryhouse merger faces competition probe - BBC News | Year 2 Micro-Business Economics | Scoop.it
The competition watchdog fears the food delivery service deal could mean worse terms for restaurants.
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The Secrets of Fixing a Price, The Bottom Line - BBC Radio 4

The Secrets of Fixing a Price, The Bottom Line - BBC Radio 4 | Year 2 Micro-Business Economics | Scoop.it
How does stuff get to us?
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Price discrimination expose
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Privatisation of the NHS: Allyson Pollock at TEDxExeter

This talk was given at a local TEDx event, produced independently of the TED Conferences. The 1948 Act establishing the NHS gave the Secretary of State fo
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Learn about the NHS
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Sell-Off - The Full Movie

Donations welcomed: http://www.selloff.org.uk/nhs/default.html For more information: www.facebook.com/selloffnhs
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Downsides of privatising family jewels
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Beating Apple, Xiaomi and the gang in China

Beating Apple, Xiaomi and the gang in China | Year 2 Micro-Business Economics | Scoop.it
How two obscure local smartphone manufacturers made it to the top
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Contestable market theory
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