Muscles in Brussels

Will Page: Welcome to Bubble Trouble, conversations between the economist and author Will Page, that's myself, and the independent analyst, Richard Kramer, where we lay out some inconvenient truths about how do financial markets really work. Today, we review Richard's trip to that most European city of Brussels, where his mingling with the finest folks in competition law and economics, all trying to figure out if, how, why, tech should be regulated. More in a moment.

Will Page here with a special request for you, our valued Bubble Trouble listener. First off, thank you for listening. Every time we put out an episode, we are so excited to see you enjoying them. Now, we'd like to ask for you to help grow the show. We'd like to ask you to tell one person about Bubble Trouble, who you think would enjoy this show. Perhaps you write a tweet, or send a text, or an email, or just post about this episode, it doesn't really matter, it just helps, just tell one person and your work is done. Myself and Richard would be so grateful, thank you.

So we've pulled this podcast, muscles and Brussels, that is, does Brussels have the muscles to regulate tech? And that is a question, how do you regulate tech? But first let's stretch the high off, do we regulate tech would be a more philosophical question to ask. Regulators, lawyers, economists, and tech companies have been doing this dance for years yet it's not clear if any of them can agree on the rhythm. And without rhythm will we get anywhere, ever? The best policy was to argue for two competition authorities, that is how can you entrust the role of regulating tech to a monopoly? Don't you need competition for ideas? After all the opposite of a good idea can also be a good idea. We seem to have multiple countries, different regions, different regulatory authorities, all competing to regulate tech, all wanting to be the first kid in the classroom to say, hey, I did it, I regulated Facebook. I did it. I regulated the Apple app store. How does that look to you when you've got competition and regulation?

Richard Kramer: Well, Will, I would not say there's competition and regulation because many of those regulators are struggling with the same issues. But I would say one of the, the fallback positions of this conference in Brussels, and with a lot of regulators around the world, is this clear sense that they've failed. That for all the efforts to regulate big anything, and here you can say big tech, big oil, big media, big pharma, uh, and on and on and on, that this notion of worshiping with the gods of efficiency and profit maximization has led to outcomes that aren't always great for consumer welfare. So they all realize that to some degree regulation hasn't lived up to its promise, but unfortunately many of them also seem to be falling prey to Einstein's famous Maxim, which is repeating an experiment again and again, and expecting a different outcome is the definition of insanity [laughs].

So they, they understand and appreciate they need to change the basis of how they approach the question of regulation, but that process requires a lot of heavy lifting. And what I saw in Brussels was a lot of self-flagellation by economists that, that their approach in the past hadn't worked and they just haven't quite figured out what the next god to worship is after efficiency and consumer prices.

Will Page: Let me just dive a bit deeper on that, because there's a, a cohort question coming up here, which is, it sounds to me like the textbooks that they're using to regulate tech today are just not fit for purpose. Now, looking at the university system today, the students coming outta university with degrees in economics or degrees in law, looking to regulate tech, are they gonna have the tools through the job tomorrow? I want to get a sort of forward look on this perspective. If we have this problem today, which is the trains left the station and the regulator's not on it, where does that leave us tomorrow?

Richard Kramer: Well, I, I, you know, that that train having left the station with the regulator not on it, I would, I would caution that to a degree because in many cases, if you believe regulatory capture theory, which is well documented in economics, the regulators actually are conductor of the train. They're orchestrating these big mergers and they don't really mind too big to fail as long as the economy is ticking along, and they're, they're happy to turn a blind eye to some of the worst excesses of, of concentrated markets as long as, uh, big companies are able to carry the national flag or be national champions. So I'm not sure the regulator has been as adversarial or as much of the hard man enforcer of competition policy that you might have wanted over the last 30 or 40 years. And, and maybe that has something to do with the fact that there's a revolving door between those regulators and the law firms and, and, and companies that, that they're seeking to regulate, or that are working for those companies.

You know, to some degree, you also have politicians that have staked their careers on talking tough about regulating one sector or another. They wanna stand up for the common person and get lower prices. And certainly you have some politicians in Europe who seem to have staked their careers on being tough on big tech. And for them to admit that what they've done hasn't had the positive impact on innovation in their local region, uh, doesn't really sit too well.

Will Page: Something I wanna get to perhaps later on in the podcast is this idea of back to that student at university being taught that a monopoly reduces output and increases costs, whereas today's tech companies kind of do the opposite, they're expanding out output and eliminating cost.

Richard Kramer: So this was a conference about competition policy and the impending regulations in, in Europe called the Digital Markets Act and the related Digital Services Act, and really an understanding that the world has changed, the power of big tech has only grown, and what are regulators going to do about it? I think at some level, this is like playing 3D chess and, and [laughs] bear with me for the analogy, because at one level of the game, you're talking about a, a, a competition for resources and control between models like the US, like China, and the EU is kind of stuck in the middle with very few of its own innovative big tech players.

At the next level of down is the rules of the game. So can the EU set and enforce these rules in their own region? Can they influence the way global firms operate, especially when they're domiciled somewhere else? And then there's the actual gameplay itself, which is sort of the moves on the chess board you make, which cases do you bring forward, which examples do you go after? Which behavior do you single out and, and, you know, this ends up being a full-time employment program for the talking shop known as the lawyers and economists who... And, and politicians who work in Brussels.

Will Page: Yeah. It's like, I want you to regulate tech, what, all of it, with a headcount of 80 people who have already got full caseloads?

Richard Kramer: Yeah.

Will Page: Like the constraint of regulation is rarely discussed.

Richard Kramer: Well, and something that you and I think were alluding to in, in your very leading questioning is that, you know, The Competition and Markets Authority in the UK has added a team of data scientists, 'cause they've realized that to regulate something first, you kind of need to understand it. And with a company like Google that spends 27 billion in R&D and hires 10 or 15,000 computer engineers and scientists every year, uh, understanding all the ins and outs of how they operate their business is not simply a matter of crafting some generic laws that might have had their basis in precedent, uh, set 100 years ago.

Will Page: Yeah. Maybe let's dive into that a second. When you think about just the scale of investment you're seeing in tech, now perhaps lack of investment you're seeing in regulation, I am not seeing an explosion in headcount in regulatory authorities. I'm not seeing money being dedicated to data science elsewhere outside of the UK. I'm not seeing advancements being made in terms of how you understand the markets. And we've actually seen a very interesting case being thrown out by Brussels because they didn't understand the market they were trying to regulate. Do you think the regulators are kind of playing golf with one hand, remember a lot of these regulators are there on two years, three year contracts, they'll be moving on in a little while, and then the size of tech on the other hand where we're looking at companies which are employing tens of thousands, hundreds of thousands of people and have a huge involvement in the local economy as well.

Richard Kramer: So this was certainly raised in a discussion fireside chat session with the guy who runs the European Court of Justice. And he brought up the point that the timelines for bringing one of those cases forward, assigning it to the case officers, examining the, the evidence, uh, submitted by all sorts of adversarial parties in some cases, and bringing that to a conclusion, then bringing it to the court, which means you've gotta schedule it and case management becomes an issue, and having a final ruling, which then gets appealed, this can take years in which time the market has changed unimaginably.

And the problem is that regulation and the political sphere certainly has no ability to keep up with the pace of change that you're seeing in the tech world, much less other sectors. And they don't do well at sort of reacting to policy changes that these tech companies can make that we've talked about before, the way in which they are able to change the nature of the market by deciding one or another of their policies will be altered. And it can throw a market in disarray, but the regulators are still back looking at the previous policy they were looking to regulate.

Will Page: And this is, this is called regulatory fatigue, where you have a large dominant player who knows that it's gonna take 18 months before that sin they committed actually comes to court and they, you know, they know there's a more than 50% chance they're gonna get off in the technicality. So they commit the sin anyway, because the time it takes to regulate says that's the optimal thing to do. And that's where you get a real kind of crisis of confidence as it were, which is, yes there is sound legal regulation, but it doesn't serve the consumer as the dominant firm can abuse the system knowing there's gonna be this fatigue, this time lag, before they get called to account for it.

Richard Kramer: I think there's a terrific example and we touch on it to a degree, and some of the other podcasts we've got, uh, Chris Leonard talking about lords of easy money in the banking sector.

Will Page: It's a good one.

Richard Kramer: So when we think about the finance sector, it is unarguable that the investment banks are among the great criminal enterprises of our time, in that they have been routinely fined billions and billions of dollars year in, year out, and at almost every turn of events, it transpired that they were peddling some or another form of financial product that was beyond the can of the regulators to understand. Whether it was collateralized debt obligations, or complex derivatives, or all of these things that caused the global financial crisis that ended up leading to, to various scandals that have touched every major bank in the world, it's not something that's confined to the US, or Europe or, or Asia, the regulators are always flummoxed by the bank's ability to innovate novel ways to make money that are always beyond the imagination of what regulators can, can keep up with.

And I'd say you often end up with banking regulation that still harks back to, uh, days of the 1930s, uh, with the Glass-Steagall Act that daresay should not have been repealed allowing the, the co-mingling of, of investment banks and, and commercial banking. But, you know, once that happened, you still had that 1930s Securities Act regulatory framework in the US, but you had innovated far beyond the imagination of those 1930s regulators to craft rules that would cope with it.

Will Page: Let's bring it to the end for part one, but just to wrap it up, I, I do want to share a parody of regulatory conferences. Um, you need conferences, lawyers need conferences, economists need conferences, techies need conferences, we need to get together and hammer stuff out. But I was once told at big regulatory event in Rome of all places, this, this golden rule of regulation conferences, which is nobody worth their soul ever goes on stage at a regulatory conference. It would be irrational to do so 'cause you, you nail your colors to some mast. The real action is in the corridors. I don't know if you found that there, but just the idea that people on the stage are the last people you should be listening to, it's the people on the corridors who don't go on the stage are the ones you've gotta be listening to.

Richard Kramer: See, I disagree with that because in this particular conference, you had the big beasts of European regulation, two of the, the most prominent commissioners. You had some of the most prominent US regulators come and they all gave-

Will Page: Wow.

Richard Kramer: ... Their set peace speeches about what they were going to do. Now, I think this all simply comes down to power and who holds it. It's the US versus China, and Europe is kind of stuck in the middle. So first, what Europe needs to do is try to carve out a space where it can influence these companies, knowing that they probably don't have the power to do much more than nudge them in one direction or another. And then you need to find laws that work. And I think there's a one great analogy for those laws that you wanna bear in mind, which is speed limits. We all know there's a speed limit on the road. How many people would say they've never driven above the speed limit? Probably no one. So what you need to come up with is rules that everybody agrees driving incredibly fast in a quiet residential neighborhood is not a good idea, that those limits can be broken in times but they need to be obeyed in principle.

And that sort of principle space regulation was exactly what led us into the global financial crisis in both the UK and the US. But the idea of beyond that, that you would have regulation of everything in real time, sort of someone having a speed camera on every car at every given time and doling out fines every time someone was a, a mile or kilometer per hour over the speed limit is clearly unworkable. So it's that balance of power, who has it, and who will exercise it because you cannot in this world of big tech find a way to regulate every instance of conduct. You have to set out some general principles and get the companies to buy into agreeing to obey them, recognizing that from time to time, everybody's gonna drive over the speed limit.

Will Page: It makes me think that great guest for a future podcast, and I'm pretty sure I could get it would be Mervyn King, the government Bank of England during that crisis. He has some very interesting thoughts about principle regulation as well. But we've kind of worked, I was wrong with regulations. So in part two, let's work out what can be done about it to make it better. We'll be back in a moment. So welcome back to part two of Bubble Trouble, where we're discussing the muscles in Brussels. That is the regulatory authorities in Brussels, did they have the muscle to deal with tech? And if they do, what should they do about tech? Okay, Richard, you're back from an in real life event, not another Zoom call, not another Google Hangout, but a real life event in Brussels. Tell us about the conference, where it was held, who was running it, who was sort of keynote speakers and the chair of the event.

Richard Kramer: So it was a very odd setup in the sense of, it was one of these conferences that attracted the top speakers, senior commissioners for the European Commission, covering technology and also flew over from the states, the leading regulators from the Federal Trade Commission, from the DOJ, looking after antitrust, some state attorney generals and so forth. And it was really bringing together economists, lawyers, policy makers of all stripes to understand how big tech would get regulated in this new world that we had. And, and, you know, it's, it's great to sort of take the pulse at these sort of events. Most everybody in the room had a dog in the fight. They were working for one of the big tech companies or working for the adversaries of the big tech companies, trying to discredit them.

Will Page: No conflict, no interest.

Richard Kramer: Absolutely. And equally all the regulators were there to persuade the, the complainants to come forward and, and bring their cases and to tell the companies themselves who might have been in attendance, how tough they were gonna be, because clearly that's a part of their political mojo. Uh, and by the way, the conference itself was, was titled with one of the catchiest sexiest, [laughs] all encompassing titles you could ever come up with, Competition and regulation in disrupted times, post COVID enforcement, resilience, innovation, concentration, labor markets, digital regulation, and digital diversity, privacy, antitrust, and more.

Will Page: Wow. Where do I sign?

Richard Kramer: As someone who, you know, when we named this podcast Bubble Trouble, we always wanted to boil it down to less is more. And can you identify what you're gonna be hearing about in, in a, in just a few words? Uh, that was a mouthful.

Will Page: Wow [laughs].

Richard Kramer: Just a quick reflection on these sort of titles. I'm not a fan of the notion of disruption. And I think in one of our earliest podcasts, we talked about it. Things are constantly being disrupted, but at the same time, none of us could live in a world, which was honestly being disrupted all the time. We rely as human beings on some level of certainty and the notion that, uh, someone is working to undermine the position of all the established authorities, the companies that we rely on every day, that's nonsense. And...

Will Page: I have, I have noticed you do turn a later shade agreement. Somebody says the word disruption.

Richard Kramer: Well, you know, think about the utilities that you live off of, whether it's water or gas or electricity or a broadband service that we use every day. I mean, there may be new models of delivering those services to you, but we don't want them disrupted. We want them consistent.

Will Page: Now I wanna get into this word monopoly, or especially this word monopolies, the plural, which you hear being banded around, which I think is a bit of an oxymoron. You can't have more than one monopoly yet. You frequently hear people say, "We're surrounded by all these tech monopolies." Which sounds like a pretty healthy competitive market. Now there's blogs likes Stratechery, which talk about aggregation theory. You'll hear other sort catchy terms used to describe tech companies. There is this derivative of the word monopoly, and I want to raise it here and see if we can get somewhere with it, which is a monopsony. A monopoly would be a, a single sole provider within the market, a monopsony is a one site of monopoly. It has a monopsony on demand. You could say that Amazon has a monopsony power in books selling because it's the only place you're gonna sell any serious volume of books. Are we really discussing monopsonies when we discuss tech? And if we're not using the word, do we know what we're actually discussing in the first place?

Richard Kramer: So the concept of monopsony is where instead of cornering a market as a supplier, that a firm would corner the market as a buyer. And therefore as a buyer of user attention, Google might have cornered the market in search because that is the only place people go. Now, one of the contradictions of using this monopsony power argument against big tech is these companies are incredibly competitive when it comes to labor and talent and they have clearly ended their collaboration or cooperation or non-compete agreements when it comes to going after one another, tech talent and anti-poaching. And when there is a desire to hire new engineers, they compete like mad. So they're not as a group, they're cornering the market for labor and tech. But between themselves, they're very aggressive competitors with one another. And that's one of the many axes where the notion of monopoly between these, among these big tech companies breaks down.

Will Page: It's begging for a cost benefit, objective analysis, a monopoly brings with it costs, but it can also bring benefits, standardization, you know, a monopsony can bring with it costs, but like you point out it can also bring with it benefits too. I just struggle with going to conferencing when the word monopolies and the plural is being used, that you can't have more than one monopoly. We're trying to discuss something else.

Richard Kramer: So there are two points about the big tech world that really confound economic theory and monopoly thinking. First of all, data is very strange because it can be owned by many people at the same time. If the data sent that big tech is using is to do with our email addresses, well, many of those different firms can aggregate lists of email addresses and it doesn't take away from one that your email address is on the list of another and second, that scales to add value in a very non-linear way. So saying that you have a thousand email addresses, adding one more doesn't dramatically change the data set that you have, or having a million and adding another million doesn't dramatically change it.

But it's not about the absolute scale, it's about the patterns or the coefficients you can find among that data set. So having a huge data set available to 20 different firms, they may look in that haystack and each pull out a very different needle. So that confounds the economic theory that says only one firm can own the haystack or getting access to the haystack is what everything's about. So if one firm is excluding another person's access to that haystack to find the needles, they'll never find them.

Will Page: That reminds me of something I've always said about data, which is value and data isn't found in reading down the columns is found in reading across them. And I guess that point about reading across to see signals across many platforms, not just one that's where value can be extracted.

Richard Kramer: So one of the very lazy analogies that was made for the last decade was people saying, "Oh, data is the new oil." And I thought about that for a little while. And I said, "Well, hang on a second. The difference between data and oil is that when oil comes out of the ground in a barrel, you can only use it once. But data, if you manage it properly and work with it properly, it can be used again and again, and extended and built upon and reworked. It can fit many purposes." So oil and any physical commodity resource like that is an exhaustible asset and data to some degree is an inexhaustible asset. It doesn't follow the same logic. And this idea that, oh, data is the new oil was some great catchphrase of some clever McKinsey economist or, or other that wanted to, to use it, to sell a bunch of reports, that's fine, but it isn't a commodity like oil. It's not a physical good that once it's used up is gone.

Will Page: Interesting. And the, the wonky economist word for this, if you remember from your lecturers is rival risks and non-rival risks. So data would be non-rival as oil is rival in production. So we take this ridiculously titled conference, which has got an acronym of more than 26 letters. Um, and we look down a delegate list. Uh, one thing jumped out to me is Cory Doctorow, surprise edition for a competition conference. And maybe for our listeners a little bit background on Corey first, but can you just bring to light what his core argument was at the conference?

Richard Kramer: Corey's a very interesting guy. I don't know him particularly well personally, but, uh, he's a science fiction author.

Will Page: Mm-hmm.

Richard Kramer: He's had a long fight against copyright and against DRM and the control of copyright by...

Will Page: He's definitely copyleft.

Richard Kramer: He's copyleft. And he has a, a very different approach to how creators should think about the value of their work, as opposed to signing the data donation or, or rights donation agreement that they tend to sign with big companies. I've got a print out of his forthcoming book to review lots of interesting stuff in there. And he's put forward this concept of adversarial interoperability, which is really a mouthful, but it's basically a way of saying, if you want to force these platforms to be more open, you have to allow others to replicate what they do or compete with them on a level playing field. And he's got some terrific examples of where the function that a company may be performing is in itself, not that complex, but what they've done is seal it in with a large moat of laws around it that weren't even designed for their industry, but for...

And he has a great line about HP Printer Ink and, you know, we all realize when we buy a printer for a hundred pounds, the ink cartridges might cost us 50 quid. And we're sort of on the hook for, for a very long time, even though the, the margins on that ink are greater than Chanel perfume.

Will Page: Yeah. It's razors or razor blades, right? And if you've ever... If you want an experiment to prove whether you could do a PhD try reading the contract from HP on their printer ink subscription service, that is one of the most baffling things I've ever read in my life.

Richard Kramer: So one of the, one of the points Corey is making, and I think this is back to the notion of this conference, is that a lot of the approaches to exclusionary behavior and antitrust really came out of that world of the 20th century, where we were talking about who had access to scarce resources. And refusal to deal, cornering markets, all these sort of, all this sort of classic antitrust no-nos came out of a world where we were fighting over scarce resources, oil, and coal, and, and railroads, and so forth, back in the early part of the 20th century. And in a world where the formula for ink may simply be, uh, coming off patent, but HP finds lots of ways to exclude others from providing you generic ink cartridges or the formula for a particular blockbuster drug after 25 years comes off patent, and someone can make the same thing at a tiny fraction of the price, and guess what, uh, it would be a huge savings to the public purse, not to pay those inflated drug prices.

Corey's argument is that you don't really support a lot of innovation by paying those steep markups. Uh, that innovation was, was done a long time ago. I've heard this argument for big pharma that actually they're not really doing much R&D, they're just buying biotech companies when they think they have a promising drug and they make huge margins on top of that, typically coming out of the public purse. His argument is we need to reset the terms of competition between big companies that built up these giant illegal moats around their businesses with this notion of adversarial interoperability. In other words, anybody can make a product that interoperates and could threaten these companies if potentially it's a better product than people will get the chance to adopt it. At this point, most people don't get a look in to see if someone else's printer ink is cheaper or even better than HP's because HP forecloses that market for many new entrants.

Will Page: It's chunk change compared to the, the hefty issues you're dealing with. But one example of that, and it's under GDPR legislation, is you should be allowed to port your playlist between one music service and another. So if I was to switch from Spotify to Apple and I've spent 12 years building up playlists in Spotify, you should be allowed to port those playlists across. So it'd be great to get Corey on the podcast to discuss that. I mean, it's a small issue, it doesn't affect markets per se, but his point is you attack the [inaudible 00:27:43].

Richard Kramer: So it turns out on that playlist analogy, Corey has a chapter in his forthcoming book, which is Why Spotify Wants You To Rely on Playlists, because it makes you reliant on them for curation and gives them the king maker power to decide what you're going to listen to. And if you can take those playlists and distribute them freely, and they become fungible commodities, well, adversarial interoperability would suggest that the best playlist makers can be available on any music service. And that would remove the power from the platforms like Spotify, over what you listen to.

Will Page: Interesting, 'cause it coincides with privacy regulation. But I actually remember a startup in 2013 in San Francisco, which built the tech to do this and was sued out of existence. So history doesn't repeat itself, it rhymes as we commonly say. Now let's get some smoke signals and get you smoking whilst you're coughing there. We want smoke signals, which make you think, you know, it's been two years since you last went to an in real life conference, you're back again on the road, you're on the [inaudible 00:28:49] to Brussels you're on the train back, what are the things that were in your head as you're on the train back from Brussels thinking, no, no, no, this spells trouble to me?

Richard Kramer: Well, the first thing I'll say is this conference really felt much less like a conversation and more like a monologue. [laughs] It was more like a political rally of all of those who wanna defenestrate big tech. Many of them have profited for years from all of the economic research or, or legal work they've done for these companies, but now they've discovered a conscience and they... What I really found missing was the neutral arbiter in between the companies and the politicians. And I don't see much value in having an endless pissing match of fulminating senators, talking about how [laughs] terrible big tech is for the world and clever lawyers and others basically running rings around them by finding loopholes in the legislation that they create, which allows them to continue their business operations unfettered. And you really need some sense of a conversation, or a dialogue, or terms of settlement that get the big tech companies, which by the way, were not on the stage at all, they were just the, the straw men punching bags.

Will Page: Interesting. So it's like the Queen's speech. It's not what she says that matters, it's what she didn't see that matters. You're at this conference and the one thing that wasn't said was any views from big tech itself. Last time I was in Brussels for a tech conference, maybe 2018, I actually did a word check on everything said on that stage and the word app didn't come up once. Market share was based on websites, the word apps didn't actually come up once in the entire day's dialogue [inaudible 00:30:30]. What are you actually measuring here? What are you actually trying to monitor regularly?

Richard Kramer: All right.

Will Page: Cigarette number two in your hand, smoke it up for me.

Richard Kramer: Well, I think the other thing that was really notable and I don't wanna push this point too much because I, I have some strong views on both sides, but in a world roiling with distrust of elites, and we've talked about how content moderation is a new tax on social media, you had a bunch of extremely well off wealthy, almost entirely white educated folks in a fancy Brussels hotel deciding what's gonna constitute innovation in a fair economy. [laughs] And it, it did strike me as a bit of noblesse oblige and, and equally, you know, I do believe unlike some of the, uh, Brexiters that, uh, suggested otherwise and will run up to that, uh, disastrous decision in the UK, that we do need experts. We do need people who really understand things at a fundamental level and have no conflict of interest to come up with a neutral arbiter role of, uh, deciding what should be fair between different interest groups.

And I certainly understand and appreciate how difficult and thorny the economic and, and legal issues are these people contend with, but you certainly didn't have a, a lot of diversity in that room deciding on something that was supposed to be affecting literally every citizen in a 400 million person block of, of civilization sitting in, in, in the heart of Europe.

Will Page: And to our earlier discussion about the federal reserve, you are seeing some business people getting onto the federal reserve with real life business experience. You might not have the PhD from Yale or Columbia, but they have set up companies. If you're saying that another competition conference goes by without any big tech on stage and anybody who's filed a patent, you know, on stage, but... And all these people are saying, we're gonna talk about innovation and disruption, it feels like a glass half full.

Richard Kramer: And I'll just... I'll add one other point here for my own perspective. I mean, I've been a financial market analyst for close to 30 years, and there were no advocates on the stage talking about the power of markets and just what the trillion dollar market caps of some of these big tech companies mean to the world at large. I mean, they are an essential staple of the wealth of pension funds around the world. They are dividend payers, they are bull works of the stock market. They are clearly highly prized by investors, but that language of the market, that discourse around the value of these companies or the perceived value of these companies was absent in that forum.

So one of the points that was made at the conference in recognition of this by one of the crazy sort of slightly right leaning economist that was there and, and a marked himself out as being different from the crowd said, "Let's face the facts. Amazon is going to invest more in technology in a given year than most countries have as their IT budget." [laughs] So you simply-

Will Page: Wow.

Richard Kramer: ... Have to contend with the fact that however you choose to regulate these companies, they are investing in innovation at a scale previously unseen by society. And they are going to come up with rafts of inventions that will be very difficult for regulators to keep pace with, especially where the regulatory frameworks are often not fit for purpose because they come from last century.

Will Page: Wow. Well, Richard took the train to Brussels to see if it had any muscles. We fleshed it out for the past 30 minutes and I think the conclusion is it's [inaudible 00:34:02] and needs to strengthen up a bit. You've been with myself, Will Page and Richard Kramer. This has been Bubble Trouble. We'll be back again next week with more bubbles causing more troubles. See you next time. [music] If you are new to Bubble Trouble, we hope that you'll follow the show wherever you listen to your podcast. Bubble Trouble is produced by Eric Nuzum, Jesse Baker and Julia Nat at Magnificent Noise. You can learn more at bubbletroublepodcast.com. Until next time, I'm Will Page.