04月20日, 2019 能源公司 admin
European moves against Google are about protecting companies, not consumers
ALTHOUGH no company is mentioned by name, it is very clear which
American internet giant the European Parliament has in mind in a
resolution that has been doing the rounds in the run-up to a vote on
November 27th. One draft calls for “unbundling search engines from other
commercial services” to ensure a level playing field for European
companies and consumers. This is the latest and most dramatic outbreak
of Googlephobia in Europe.
Europe’s former competition commissioner, Joaquín Almunia, brokered a
series of settlements this year requiring Google to give more prominence
to rivals’ shopping and map services alongside its own in search
results. But MEPs want his successor, Margrethe Vestager, to take a
firmer line. Hence the calls to dismember the company.
The parliament does not actually have the power to carry out this
threat. But it touches on a question that has been raised by politicians
from Washington to Seoul and brings together all sorts of issues from
privacy to industrial policy (see article). How worrying is the
dominance of the internet by Google and a handful of other firms?
Who’s afraid of the big bad search engine?
Google (whose executive chairman, Eric Schmidt, is a member of the board
of The Economist’s parent company) has 68% of the market of web searches
in America and more than 90% in many European countries. Like Facebook,
Amazon and other tech giants, it benefits from the network effects
whereby the popularity of a service attracts more users and thus becomes
self-perpetuating. It collects more data than any other company and is
better at mining those data for insights. Once people start using
Google’s search (and its e-mail, maps and digital storage), they rarely
move on. Small advertisers find switching to another platform too
burdensome to bother.
Google is clearly dominant, then; but whether it abuses that dominance
is another matter. It stands accused of favouring its own services in
search results, making it hard for advertisers to manage campaigns
across several online platforms, and presenting answers on some search
pages directly rather than referring users to other websites. But its
behaviour is not in the same class as Microsoft’s systematic campaign
against the Netscape browser in the late 1990s: there are no e-mails
talking about “cutting off” competitors’ “air supply”. What’s more, some
of the features that hurt Google’s competitors benefit its consumers.
Giving people flight details, dictionary definitions or a map right away
saves them time. And while advertisers often pay hefty rates for clicks,
users get Google’s service for nothing—rather as plumbers and florists
fork out to be listed in Yellow Pages which are given to readers gratis,
and nightclubs charge men steep entry prices but let women in free.
There are also good reasons why governments should regulate internet
monopolies less energetically than offline ones. First, barriers to
entry are lower in the digital realm. It has never been easier to launch
a new online product or service: consider the rapid rise of Instagram,
WhatsApp or Slack. Building a rival infrastructure to a physical
incumbent is far more expensive (just ask telecoms operators or energy
firms), and as a result there is much less competition (and more need
for regulation) in the real world. True, big firms can always buy
upstart rivals (as Facebook did with Instagram and WhatsApp, and Google
did with Waze, Apture and many more). But such acquisitions then
encourage the formation of even more start-ups, creating even more
competition for incumbents.
Second, although switching from Google and other online giants is not
costless, their products do not lock customers in as Windows,
Microsoft’s operating system, did. And although network effects may
persist for a while, they do not confer a lasting advantage: consider
the decline of MySpace, or more recently of Orkut, Google’s
once-dominant social network in Brazil, both eclipsed by Facebook—itself
threatened by a wave of messaging apps.
Finally, the lesson of recent decades is that technology monopolists
(think of IBM in mainframes or Microsoft in PC operating systems) may be
dominant for a while, but they are eventually toppled when they fail to
move with the times, or when new technologies expand the market in
unexpected ways, exposing them to new rivals. Facebook is eating into
Google’s advertising revenue. Despite the success of Android, Google’s
mobile platform, the rise of smartphones may undermine Google: users now
spend more time on apps than on the web, and Google is gradually losing
control of Android as other firms build their own mobile ecosystems on
top of its open-source underpinnings. So far, no company has remained
information technology’s top dog from one cycle to the next. Sometimes
former monopolies end up with a lucrative franchise in a legacy area, as
Microsoft and IBM have. But the kingdoms they rule turn out to be only
part of a much larger map.
Looking after their own
The European Parliament’s Googlephobia looks a mask for two concerns,
one worthier than the other. The lamentable one, which American
politicians pointed out this week, is a desire to protect European
companies. Among the loudest voices lobbying against Google are Axel
Springer and Hubert Burda Media, two German media giants. Instead of
attacking successful American companies, Europe’s leaders should ask
themselves why their continent has not produced a Google or a Facebook.
Opening up the EU’s digital services market would do more to create one
than protecting local incumbents.
The good reason for worrying about the internet giants is privacy. It is
right to limit the ability of Google and Facebook to use personal data:
their services should, for instance, come with default settings guarding
privacy, so companies gathering personal information have to ask
consumers to opt in. Europe’s politicians have shown more interest in
this than American ones. But to address these concerns, they should
regulate companies’ behaviour, not their market power. Some clearer
thinking by European politicians would benefit the continent’s citizens.