These companies “use their monopoly power in their sectors to raise their prices and keep them high,” the organizations said in their report.
The profit margins of the twenty largest companies in the world have grown at a dizzying pace in the last five years, complained four European collectives on the occasion of the Davos forum, calling for an end to situations where monopolies have been created.
Between 2018 and 2022, they calculate that the twenty companies with the largest market capitalization had an average margin—the difference between the selling price and the cost of producing a good or service, as they define it— 50%, especially Apple, Microsoft, Saudi ARAMCO and LVMH.
That’s twice the profit margin of half of the companies analyzed, a broad sample of listed companies, according to their report released as the world economic forum in Davos, Switzerland, gets underway.
The comparisons for the year 2022 were made with approximately 34,000 companies. In previous years, the sample size was different.
However, the margin level of the twenty largest companies increased by almost 7 percentage points compared to the period from 1995 to 2022, while that of the sample on average increased by just over 1 point, the report prepared by the organizations Balanced Economy Project, Global Justice Now, Center for Research on Multinationals (SOMO) and Lobby Control.
These companies “use their monopoly power in their fields to raise their prices and keep them high, gouging consumers because they can,” it says in its text, which clarifies that the 14 largest are partners in the forum and “are involved in setting the agenda” of the forum in Switzerland, where some 60 heads of state and government are expected by the end of the week.
Ahead of the forum’s opening on Monday, the NGO Oxfam hailed the doubling of the fortunes of the world’s five richest people by 2020, largely thanks to the take-off of stock markets during the pandemic.
The four European organizations call, among other things, to end monopolies, especially to control mergers, and to break up dominant companies that “lock users in their ecosystems”.
They also call for any company whose dissolution would be dangerous to be transformed into a public service, and for international law to be amended so that mergers are not facilitated or promoted.
Source :Skai
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