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Increased competition for technology titans is essential for the health of the global economy, but breaking them up doesn’t seem like “the right answer,” said IMF Managing Director Christine Lagarde, on Thursday.
“Too much concentration — too much market power — in the hands of too few is not helpful in the medium or long-term,” Lagarde said during a briefing with reporters at the start of the spring meeting of the international finance organizations. A reporter specifically asked her about Facebook , Google and Amazon though Lagarde didn’t mention any company by name.
More competition would foster productivity and innovation, the IMF chief said. But Lagarde said she was uncertain how to facilitate “market disruptors.”
“I’m not sure breaking up some of the tech titans would actually be the right answer. It used to be the right answer,” she said.
The problem requires “new thinking” and this must happen “quickly,” she said.
Lagarde, to be clear, doesn’t have the power to break up the companies, which rests with national competition regulators. Her comments are a sign, however, of the thinking of senior policymakers. She was mentioned as a possible prime minister for French President Emmanuel Macron.
Concerns about a trade war also featured in Lagarde’s comments in the wake of recently enacted U.S. tariffs on steel and aluminum, as well as proposals for tariffs on a variety of Chinese goods.
Asked who would suffer from a trade war between China and the U.S., Lagarde said she was “not in the business of identifying casualties,” but added the entire global economy would suffer.
Asked if President Donald Trump “was doing right,” Lagarde said the IMF was supportive of the recently enacted corporate tax reform. The IMF just thinks the U.S. “should take advantage of the current upswing” in growth and reduce its budget deficit, she said.
An IMF report published Wednesday said the U.S. was the only advanced economy expecting an increase in debt-to-GDP ratio over the next five years.
In an extraordinary moment, Lagarde expressed anger after she was asked about the status of women in India and the recent rape and murder of an eight-year-old girl in the country.
“What has happened is just revolting,” Lagarde said, her voice cracking. “And I would hope the Indian authorities, starting with Prime Minister [Narendra] Modi, pay more attention, because it is needed for the women of India,” she said.
She then added that she was speaking for herself and not the IMF.