Free space

Between monopoly and innovation

Faisal Muhammad Al-Shamri

February 20, 2021

The anti-monopoly issue in the United States, which led to the disintegration of the old American telephone and telegraph company, into seven new regional operating companies, was due to governmental economic and legislative struggles, resisting monopoly and economically unhealthy practices, and lasted for decades, and represented lessons that must be considered by economists And legislators in all countries of the world.

The goal is the supreme interest, and the interest of the nation, not the interest of companies, and the establishment of economic empires that reinforce monopoly.

Likewise, the US case against "Microsoft" was a famous anti-monopoly case, in which it was accused of illegally maintaining its monopoly position in the market for personal computers, mainly through legal and technical restrictions that it places on the capabilities of computer manufacturers and users, where the court ruled That the actions constitute an illegal monopoly, according to Article (2) of the Sherman Antitrust Law.

The concept of a circular economy requires a complex understanding and a qualitative application in order to succeed, and achieving this comes through a societal responsibility that may reduce commercial profitability for some time and for some sectors, but it will radically enhance the local value added and the economic cycle, and contradict the concepts of monopolistic practices.

If the participation is not voluntary, then it must be transformed into a legislative obligation, and binding economic controls, governed by effective fines, so it is unreasonable to see giant companies using their privileges and monopolizing activities and contracts that complement their work in economic fields that have no connection with their basic activities for which they were licensed and established. Not for nothing except because one of the decision-makers in it saw that they could increase profits by establishing other companies that had nothing to do with the original activity in the group.

For example, we see a national giant in the technology and communications sector, with a monopoly in the facilities management business in its group, in a company established in order not to use outside companies, to provide some sums, instead of giving it to specialized local companies.

We were surprised to find that individuals' telecommunications services (the most expensive in the region), corporate services and government services, were followed by services related to fire prevention and alarm systems.

They began by studying the development of medical systems and records, and provided security services and systems, surveillance systems, network security services and penetration tests, not to mention satellite communications projects, satellites, and hosting solutions.

In another scene, we see another national company, with a capital of more than 10 zeros, that establishes a vehicle rental company with a foreign administration, only to limit the rental of vehicles to a group of its subsidiaries, in the company that established it, and to avoid contracting with companies in the market for this purpose, noting that the sector Vehicle rental has been slowing business for years.

The traditional antitrust is a matter in which the concerned departments have reached a distinct institutional maturity, but the unconventional monopoly is the challenge of the stage.

Economic legislation must be amended to prevent commercial empires from becoming bloated, slack, and cancerous expansion harmful to healthy economic practices, and to seek to correct the wrong application of the concept of "our oil in our flour", as it would disrupt the wheel of the circular economy, delay innovation, or deprive us of the privileges of the cycle of an ecosystem that stimulates innovation, It creates an economic environment based on monopolistic applications and practices that may hinder the growth of small and medium enterprises, and may even contribute to their death.

The directives of His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, to ensure that semi-government real estate companies do not compete with private sector investors, are a light for integrated work, and the imperative for the development of work mechanisms away from monopoly or unhealthy competition. The legislative experience in dividing the company (AT&T) for legal reasons, and to prevent monopoly, is useful as a benchmark and a model that may contribute to stopping these monopolistic practices, because of their long-term harm.

We hope that governmental or registered companies in the stock market, or family and private companies, will take into account avoiding it, before the concerned authorities govern it, monitor its compliance and prevent it.

To focus on sustainable healthy growth, based on innovation, in developing our specialties, in a way that enhances the competitiveness of our country.

We are looking forward to economic sessions organized by the Ministry of Economy, the Securities and Commodities Authority, and the concerned authorities, with business leaders and those affected by these practices.

If we want to be the foundation and success of the next generation of "Amazon" or "Tesla" or "Microsoft" or "Google", and other success stories of entrepreneurship, to protect them, to nurture their growth, and to create an ideal economic environment that promotes innovation and competitiveness, and protects these sectors In a proactive and unprecedented manner, with a framework of legislation, governance and controls, honoring positive practices and motivating institutional contributions, and issuing reports on compliance with decisions and sovereign laws related to supporting entrepreneurship in the country, this is the detail of success between monopoly and innovation.

- Digital transformation consultant, lecturer, and certified institutional excellence expert

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