Google’s $6B Miscalculation on the EU
bloomberg.com
bloomberg.com
People seem to forget that Europe is not a country. Europe does not have a single uniting language. What happens, is that every country starts their own smaller versions and they stay mostly within that country. If they want to move to another country, there's often already a major player there, and they might not have the means to kick them out.
I think the reason that silicon valley is so powerful, is that the initial market is 325 million people who all speak the same language. Once you get the US market, you have the size, name and means to easily start conquering European countries. It's always about scale...
Despite having many different languages, in some ways Europe is a more homogenous market than the US.
For example, an insurance business can operate freely across Europe with only one small piece of additional paperwork. I think it's actually an A4 piece of paper. In the US they'd have to be regulated separately by nearly every state.
French search in French, Germans in German, Danes in Danish, Spaniards in Spanish, Italians in Italian, Dutch in Dutch etc. Then, if your local language doesn't give you good results, you default to English.
Online shopping is mostly a local thing with Amazon as the prominent exception. Even in the market for plane tickets local websites dominate, meaning that a French person travelling from Paris to Berlin is likely to use a different website than a German guy travelling from Berlin to France. Again, the exceptions seem to be mostly American.
European countries even have their own payment solutions.
So how is this different from the current situation with Google dominating the market? Google works in French, German, Dutch, Spanish etc! You only need one company in based one country and they can work in all languages. And if they grow big, they setup offices in different countries, for country specific or language specific searching.
1. Slavic languages have heavy inflection. If Google doesn't understand all the possible forms of a word, it will give you poor results until you search again by changing your query slightly. 2. Google doesn't understand common synonyms, so it doesn't give results that contain synonyms. 3. Russian websites may not care about google rank as much as Yandex, so they might not even be indexed.
I don't know how, but there are thousands of websites I can find by searching Yandex for a certain thing that will not be on Google. It may be those three things combined, or other factors I didn't think of.
From our perspective the EU common marked is pretty much just a pipe dream. Being able to start a business in one EU country and just automatically have access to all of the 500million EU citizens would be awesome, but right now that not how it works.
I haven't done it but isn't the thing with the new VAT regulations that you can pay your taxes to one revenue service (and just register with one) and they will divide it according to your sales data (e.g. the customers country)?
Or do you mean that you have to pay VAT at all if you do this? In this case your problem is more political and about the concept of VAT in general. I mean almost any EU country had it for a long time. It sucks that there are huge differences when it comes to the exact amount but the concept itself is nothing new.
I think that only works if you have limited business, but I'm not sure. I believe the problem is that we're in a country with 25% VAT, but if we want to charge our German customer only 19%, we need to do that via a German company, otherwise we would have to charge them the 25%, leaving us uncompetitive (6% is more than our entire profit for some products).
If you mean VATMOSS then you don't have to be running a Limited Company - individual sellers as of January 2015 have to now account for the tax due in the country of the buyer. This apparently applies to sellers from outside the EU too, if you're selling certain classes of goods (non-personalised intangibles) over the internet to the EU then you're supposed to retain [3 pieces of!] evidence of the locality of the purchaser and deal with that country's tax office to pay the required tax.
The "MOSS" [Mini One-Stop Shop] bit is a system that individual countries in the EU use to send the payments to the countries where the tax is due.
The method you mention works for tangibles or personalised goods. With VATMOSS there is no exemption for SMEs or low-revenue situations or anything.
If you think you'll scale the business then it's best to start with a single company registered in a EU country of your choice. Generally, easiest to pick the one you will find easier to deal with, or you think you'll have the most sales in.
The local tax regulations will specify when you have to pay taxes in other EU jurisdictions. There are limited exceptions when you're just getting started. This only means registering for taxes - it's similar to the idea of US company registering to pay local state taxes.
Employing people is different and will require registering for employment taxes in each country.
Any competent business accountancy firm should be able to provide assistance: generally best to work with one which has relationships or offices in the other EU countries you're interested in operating in. If you can't afford that then your local government business department will be more than happy to help (as you are generating tax!): in the UK that's the Department for Business Innovation & Skills [1].
[1] https://www.gov.uk/government/organisations/department-for-b...
The only fact that the there are some 20 different languages makes the EU a much less omogeneous market than the US.
This withouth considering that each country has its own employment policies, social security services, healthcare system, education system, revenue service...
I'm strongly pro-union, but it's far from perfect, or even efficient, in the current state.
No, I don't think "in some ways Europe is a more homogenous market" is far-reaching at all, especially when accompanied by a concrete example.
Source: People pay me to do that stuff.
Search is now a mature industry, it is always better to go for the new places where there are no dominant players. Google biggest competitor is not another search engine but Facebook. This is the ways it is supposed to work.
If someone offer you a product cheaper than you can make it yourself, take the offer and find something better to do. Everyone looses by protectionism.
I think everyone forgets the innovation in Ad Words which made it possible for small businesses to thrive. One can now get started with 100$ marketing budget while one before needed 10000$.
It's funny, I've heard several times the total opposite from startup founders ("It's easier to go for a big market and to chunk some % in order to get viable, rather than going on a totally new market in which you'll have to both be better than the competition and convince the clients that's it's actually a promising market")
> If someone offer you a product cheaper than you can make it yourself, take the offer and find something better to do. Everyone looses(sic) by protectionism.
Uh? Protectionism has historically worked exceptionally well to develop your own industry, as a matter of fact, all the big players heavily used protectionism in their time to nurture their industry before being big (England, USA, China, South Korea). You just cannot compete with an on-going industry while starting from scratch, so your industry will never take off.
Protectionism is only good if you're already the best in town & want to be sure that you keep the upper hand, but it helps in no way the under-developed country.
Don't see the innovation with Ad Words: as _every_ small company can use it, you fight towards the bottom and sometimes against cowards instead for quality which an independent non-ad-financed search engine would much better reveal.
This may be the result of good search and Sturgeon's law. https://en.wikipedia.org/wiki/Sturgeon%27s_law
If so, the real problem is that Google search is incapable of identifying content by quality. As a result, the more Google searches, the more crap it finds, and the worse the results become.
Refutations of this idle hypothesis welcome ;-)
If guelo's argument that Google not being in China fostered more tech companies in China is correct, then removing an initially dominant foreign company with big first mover advantage and economies of scale can actually increase competition in the market.
That said, once the home grown companies are sufficiently mature to compete on a level playing field with already established companies I agree the protectionism should be withdrawn again
Look at Russia. They don't have Chinese-style technical or political protections to keep Google out, yet the market is dominated by local players like Yandex and Mail.ru.
Obviously the Russian government exerts control over Google's Russian operation, but it's not explicit like in China. This has meant Google can continue to operate in Russia without losing face ("do no evil" and all that), whereas it wasn't possible in China.
Your link is about the Russian trade embargo, which is not directly relevant... But it does illustrate the huge difference between Chinese and Russian trade politics. China keeps tight reins internally on content and communications, but wants to ensure the free flow of material imports and exports.
China wouldn't allow an external political disagreement to disturb relations to the extent that Western imports would be banned. At least I can't imagine French cheese being burned by the tonnes in Shanghai...
Any attempt by Europe to try that, would destroy the European economy. Germany is hyper dependent on exports. The US eats most of its own dog food when it comes to manufacturing, Germany does not. Nearly all of Europe, other than Russia and perhaps Norway, lacks the ability to be truly energy independent today. It's obvious who would win the import / export restriction war.
There's one country capable of being fully self-sustaining across science, innovation, manufacturing, natural resources, technology - that's the US. Europe has barely shown an ability to cooperate even in a poorly functioning manner when it comes to integration, much less of the extreme integration such a command economy system would require. Even the Eurozone experiment has been a disaster for the majority of countries involved. There's no possibility of the kind of extreme integration the kick-the-Americans-out plan would require, ever happening.
Kick the Americans out? Ok, well now BMW, Porsche, and Mercedes are banned in the US. Germany just lost a huge part of its economy (look up the two biggest markets for their vehicles: the US and China).
As someone living in a German city which is a world leading car manufacturing center, I would actually like to see the end of German auto industry. The whole German economic system is geared towards those big car manufacturers, and it's very hard for small businesses and enterpreneurs to navigate through all of that bureaucratic mess created by big German corporations. Letting them fail would actually help making German economy much healthier in the long run.
I am not even sure, that Silicon Valley is ahead when it comes to "digital stuff" inside cars. It is my perception at least, that companies like Mercedes or BMW had many of the digital helpers first. I therefor think Germany would be a great place to start a tech-startup apart from the next social network.
You mean besides the extreme bureaucracy, poor funding opportunities, poor exit opportunities.
Germany is probably one of the WORST places for a start-up.
As someone doing business in Germany since the age of 17, I would actually like to know, what you mean by that. Of course employment works different here (like generally in Europe), and I also give you that it is much harder for non-Germans, but if you know the language you can generally just call the folks at our IRS and they are happy to help you.
Starting to freelance is literally just filling out a one page online form at the Gewerbeamt, after that do not call them, they call you.
Setting up an entity is a bid harder, but come on, registering an UG or a LTD (in the UK, this is Europe after all, you can register your company pretty much where you want to) is not black magic either. It could be easier, but I do not buy that we are missing opportunities, because you have to google it first.
> poor funding opportunities, poor exit opportunities.
>Germany is probably one of the WORST places for a start-up.
I give you lacking funding opportunity, but the notion seems to be, that early stage funding is pretty okay, mid and later stage rounds seem to be the problem. We do have an exchange in Frankfurt and car companies are buying startups in their space, the problem is more, that there simply are not that many of them.
There is also the possibility to join Rocket, their E-commerce and (locale) marketplaces seem to do just fine, funding-wise.
I think we are pretty okay, even without the short-lived social stuff, that SV creates, which some people call a scheme anyway. What I would like to see more of are SaaS products in many different spaces. I do not think that missing funding or a bureaucracy are the reasons why we do not have more of them. I think the reasons are rooted deeper in society, which is slowly changing over time, thanks David Fincher.
Also: Compared to what? SV or the 192 other countries that exists besides Germany and America?
Denmark 4
France 46
Germany 62
Italy 77
Netherlands 10
Spain 71
Sweden 29
Japan 94
Korea 83
US 15
Canada -73
Mexico -19http://www.eia.gov/dnav/pet/pet_move_wkly_dc_nus-z00_mbblpd_...
Yes but not because some EU bureaucrats have been born with some innate fetish for free trade. It's because the EU is easily influenced by deep pockets.
Protectionism is how every nation on the planet developed. Why are Americans driving South Korean/Japanese cars and not the other way around? Because the south koreans and the japanese imposed large tariffs on car imports and the US did not. Their car companies had free range on their own turf. Which gave them time and money to develop.
Silicon valley is not giving the outside world any chance of competing.
The reason that the Americans are driving Japanese cars is that they were built in the US (which happens because of the protectionism). Ford doesn't build cars in Japan. The end result is good for most people (consumers get more choice, jobs are still in the country).
Once the major players from hyper-competitive markets inevitably enter the protected market, then they outperform the resident industry there. Protectionism props up non-competitive markets, which is disruptive for citizens when they fall down.
The auto industry might not be the best place for where you want to apply protectionism. But one pretty good usage is when the local industry is in its infancy.
It's pretty well accepted that the IMF forcing so many African countries to drop agriculture-related tariffs has been among the biggest failures of modern economics.
They care about consumer freedom, that's why. What you are implying is that competition can never work and that people with a head start should be regulated away.
It screws the consumer and there is no proof it works best in the long run. France is super protectionist but they aren't doing so well. In many cases, it just has knock on effects that make other industries uncompetitive. Can't buy the best engines, therefore we can't compete in any market that requires good engines, etc.
The fact is that we live in a kafkan place where everybody seems to think that letting consumers choose what they want to buy hurts them, that delivering goods make a country rich, but receiving payment makes it poorer, and that a government picking winners on every market is the best way to ensure competition.
You'll certainly see several protectionist policies at the US, what is extremely annoying, because they claim to be a completely open country. But the US is still one of the less protectionist ones.
From the Word Bank data, there were 40 countries with lower median tariffs than the US, 4 tied with it, 71 with higher tariffs, and 98 without data in 2013.
Between the countries with lower tariffs there are extremely rich ones, fiscal paradises, EU countries (that have zero tariffs between themselves), and 4 poor ones.
Between the countries with higher tariffs there are basically the poor countries, and Australia. I don't think I've seen any other rich country there.
So, yes, the US is within the countries with lower tariffs. But also yes, every other country that you'll think of has probably lower tariffs than you.
You must be joking. Countries with open markets develop way faster than protectionist countries. If mercantilism is so good then why are the Asian Tigers doing so well and communist countries doing so bad?
It would be nice if at least one such country could just blatantly state their motives up front to be judged on their merits: "We're choosing to prohibit a non-local company to encourage local replacements."
There are local monopolies everywhere, even in the USA. And they are protected by the local (city, county, state, federal) legislation that favors local business. Just try coming out of nowhere and starting new water supply business somewhere in Texas (constructed example, but point stays).
Nobody prevents you from buying local right now, so that's a red herring. If you want to force others to do the same, you should pay their increase as well. Are you prepared to do that?
That's what governments and elections are for. People vote, government make it more complicated for foreign companies to compete on the local market. People pay a bit more for for a bit worse service, and tax rate for everyone gets lower because of reduced unemployment benefits and increased tax income. Everyone locally gets it a bit better.
I'm not saying that one or the other option is clearly better. There are many ways in which "fully open", "fully closed" and "somewhere in between" policies can fail or succeed. It's always matter of balance, but favouring local companies is not bad per se.
When I go to vote, I vote for the government and policies that will make my life and life of the members of my community better, not the government that would make the world better in total by making it a bit worse for us. It doesn't work that way.
Forcing others who disagree with you to go along, yes. That's a very big hammer, and should not be applied lightly. (I'm not saying it should never be applied at all; there are fundamental aspects of society that only seem to work with that pressure applied.)
> People pay a bit more for for a bit worse service, and tax rate for everyone gets lower because of reduced unemployment benefits and increased tax income. Everyone locally gets it a bit better.
"a bit worse" is downplaying it quite a bit; sometimes the result is quite a lot worse. And when you're talking about services with network effects, sometimes the result is "fundamentally not the same service at all". If you're stopping people from participating in the same Internet as everyone else, you could just as easily be slowing your own local economy and breaking opportunities for them to create the next service that'll actually be the best for everyone. And unless you're prepared to make your country completely self-sufficient with no reliance on the outside world, "increased tax income" isn't going to help you when it turns out the services people actually want aren't made in your country and never can be.
As an alternative to dragging others down, if you really want to spend a pile of money boosting your local economy, and you want to do that via government, how about supporting local businesses as they improve, and encouraging them to compete with services provided elsewhere? "Keep up" is always better than "wait up".
What is wrong with that is that a local company will have to base their offerings on subpar components, and won't be able to compete externally.
Everyone wants the benefits of protectionism on their own turf without paying the price of everyone else being protectionist and that at a minimum requires pretending you're not being protectionist.
foreign company tax avoidance?
"Technology giant Google last year paid $11.7 million in corporate tax to Australian government coffers, on revenue of $438.7m and profits of $58m." ~ http://www.theaustralian.com.au/business/media/google-admits...
I think we, as technologically included people, tend to overestimate how old the internet is to most people outside of maybe early email usage.
Also the implosion of companies (like Yahoo) is a factor here. If Yahoo hadn't been really stupid they would still be dominant - and it would have been hard to stop them.
Of course people can overtake when the leader throws the lead... but it's luck and also hard.
MySpace vs Facebook happened after Google rose to dominance.
Also, Google Video vs YouTube.
I think you forget just how FAST Google blew up. In 1999 they were basically nothing - by 2004 they were the largest search company on the internet.
Facebook wasn't even a thing until 2004 - after the Google IPO. So no, Myspace vs Facebook didn't happen after that.
Also Google Video was just plain crap. It's like comparing Google+ to Facebook, it was never going to last.
Remember though that accurate results is a clear market winning feature - we've seen that the average user quite simply doesn't care about privacy that much.
For example, during the mobile apps gold rush. I had a finished Android app ready to go for almost a year waiting for the "Android Market" (Now the "Play Store") to allow Canadian sellers. I could not sell even in my own country (at least not with any visibility) while my American competitors could accumulate a huge head start. I had to wait for Google to jump through the Canadian regulatory hoops to allow Canadian sellers into their store. It was frustrating as hell.
The other problem is that new technologies often evolve from an ecosystem of other new technologies. If we only have late access to Netflix or Uber or self driving cars, it becomes difficult to be competitive in the technologies surrounding these technological shifts. If you're last to experience newer technologies on a daily basis, you're also last in a position to evaluate and predict where they are going which gives you a significant business disadvantage.
In order to build on top of the leading edge you have to have good access to the leading edge wherever it may originate from.
How? Great firewall of Europe? Or what exactly are you proposing?
On the other hand, the article indicates that Microsoft is quite active in the whole investigation, and they're not exactly a European company either...
Forcing them to follow basic rules of fairness is usually enough to keep them out.
Frankly, it wouldn't be that surprising if net neutrality started getting violated in Europe by protectionism laws.
However, if we granted more fairness to the companies, we wouldn't have more or better companies. We'd just be invaded by huge US companies, because they're just better and move faster. So, yes, we have to start with smaller actors who just rely on the openness of the markets of dominant actors: We couldn't build Apple but we rely on their Appstore to have fair rules, we couldn't build Amazon EC2 but our companies rely on the openness of the EC2 service, we couldn't build Windows but we rely on Microsoft publishing its API. And this API documentation is exactly the subject of the $2bn fine that Microsoft received from EU in 2003.
I'm sorry, perhaps US performs too well, but we need open APIs in Europe. From the fines I've seen, the decisions aren't generic protectionism, they're focused on keeping free market so we can have some local startups too.
As for the issue at hand (YT being slow), like a sibling post states, that's because they refuse to peer at DECIX where everybody else is. They even tried to frame the NSA scandals as "IT companies, be responsible, keep user data in German networks and peer with us directly (on our terms, which will be expensive for you - they 'forgot' to mention that in the press releases)".
The best way to make DTAG more customer friendly (both upstream and downstream) is to move somewhere else.
Luckily in cities you have 5+ ISPs to choose from (some of them DTAG resellers, but still an improvement), and even on the country side it's typically at least 3.
ALL traffic from DTAG users first runs to a Level3 datacenter in New York, and from there goes to other users.
While all other German ISPs have a peering node at DECIX
(TAT-14 is a transatlantic cable owned by DTAG and Telia)
It’s common knowledge in the industry by now that the DTAG uses their 40 million users as leverage to force companies to directly peer with them (and pay for peering).
My two cents:
1. Baidu has more market share than Google before Google left. 2. Google's chinese processing was bad before Kaifulee, but now Google's Chinese NLP is way better than rest of the world.
If the EU, or UK want to improve their tech chops, they should allocate more resources to the brightest of their respective populations.
If the UK scrapped the war on drugs and gave the billions which are saved/earned through taxation to people who tested as high IQ (say > 139) to invest in STEM activities, what would happen?
I'm not in the set of high-IQ individuals which I propose giving additional resources to; but it's clear in a positive sum game I would benefit greatly from their invention (creation of new products/services) and innovation (improvements of current products/services).
Unfortunately, there's a recent fetish for equal outcome for all (vs. even equal opportunity). As soon as there's equal output from all: that'll makes sense!
I'm tired of Anti-American sentiment when your governments are in bed with ours. American companies weren't the only ones sharing data. German and Belgium telecoms were in bed with spy agencies and not just with the Five Eyes. In public Merkle was outraged but her spy agency was just as much to blame.
This is a global problem not just a U.S. and EU one.
Anytime someone wants to kick me out I take offense. He's talking about kicking out all American companies and making their own tools as a replacement. How is that not Anti-American?
These are not NSA issues its a global issue. What are the ROE for cyber attacks? There are much deeper issues beside the NSA reading my gmail, which I dont mind.
What I do mind is undermining technologies that are supposed to protect us from 3rd parties (criminals and governments alike).
Absolutely a huge concern going forward but right now they don't have anywhere near the reach of the US.
> Or the internet propaganda firms in Russia?
On a completely different scale from the US.
> The UK arguably
Their domestic spying is just as atrocious but internationally they are just tools of the NSA.
When one actor is 10x the size of all other actors combined globally it isn't out of line to put the majority of the scrutiny on them and the companies they have deep influence on.
>That might be the scariest thing of all for Google. It isn’t dealing with an antitech ideologue or a competition czar consumed with cementing a personal legacy. It faces a straightforward prosecutor in a hostile political climate dominated by powerful local business interests with their own regulatory agendas. Good luck to Google searching for a way out of that.
I've been following this story for a while and I watched the press conferences she gave and that's the impression I got from her as well.
I think Google is definitely not going to skate by like they did in the US with a slap on the wrist. The investigation into Android is going to be another big one and if they break up Google's ability to bundle/tie in their services, it pretty much neutralizes the entire benefit of Android to Google as a defensive moat.
This is fantastic. I wish we had some more people of her caliber in US politics. Reflects well on the EU that she was elected.
It would, if hers was an elected position :P
The European Commission is a bit of a strange beast. As is the rest of the EU, to be honest.
The Commission consists of the President of the European Commission, the High Representative of the Union for Foreign Affairs and Security Policy (effectively its foreign minister), and 26 other commissioners.
The President of the European Commission is elected by the European Parliament[0], and the High Representative is then chosen by the European Council[1], with the consent of the Commission President, who cannot be from the same country as the President and will be one of the Commission's Vice Presidents. The other 26 Commissioners are then appointed by the unrepresented Member States, so they each have one Commissioner.
The Commission President then assigns each of the Commissioners (except the High Representative) a portfolio and then the entire body is subject to a confirmation vote by the European Parliament before it can take office.
[0] It can't just vote for anybody, though, the European Council technically has to propose a candidate "taking in to account" the results of the results of the election to the European Parliament, although in 2014 (the first time they had the opportunity since the rule was introduced) Parliament successfully managed to establish the precedent that the Council must nominate the designated candidate ("Spitzenkandidat") of the European Political Party[2] that won the most seats at the election in the first instance.
[1] The European Council is the body consisting of the heads of state and government from the EU Member States, not to be confused with the Council of the European Union, which consists of ministers from Member State governments, and the Council of Europe which is a distinct organisation.
[2] European Political Parties aren't political parties in the same way they are at national levels - they are more coalitions or federations of national political parties - and they are also distinct from political groups in the European Parliament.
If they try and break up Google though, I expect Google to leave the EU wholesale rather than comply.
It seems completely ridiculous to call those two different markets. Finding the most relevant X on the web is fundamentally part of the same market no matter what X is.
Now, if they'd accused Google of using their market position in search to promote gmail, for instance, they might have a point. Not a very good point, but at least an understandable point. But calling "general search" and "product search" two different markets? They seem to just be looking for a way to extort concessions out of a company that seems like a tempting target, all the more so for not being an EU company.
Later in the same article is an indignant accusation that Google's display of other types of search results don't label themselves as ads. Of course they're not; if you search for an address, and you conveniently get a map of that address (which is one of the most likely things you were looking for), that's not an ad, that's the content you actually wanted. (By contrast, the garbage next to it telling you about other services related to random keywords in the search terms are ads.)
Now, the crazy 2014 deal that fell through certainly does sound like antitrust-style collusion; it's certainly ridiculous to have competitors bid for the right to appear as a list of competing services at the top of Google search results. But far from the "extortion" it's described as, it sounds a lot more like collusion between multiple large companies to exclude smaller players. The solution isn't to find a way to include more companies; it's to forget that that anticompetitive arrangement was ever proposed, and continue on with the current situation where Google shows users whatever it thinks they're looking for.
(I'm not suggesting that Google has pure and altruistic motives here; far from it. They're out to make money. I'm just saying that they've done nothing wrong here, and more generally that there's no wrong here for anyone to be accused of doing. That some random local company in the EU got annoyed at not being at the top of Google search results should not be Google's problem, or anyone's problem other than that company's.)
And then, towards the end of 2010-early 2011, Google decided to enter the game with its Google Places. They had no people on the ground to collect businesses' addresses and make sure that the advertised phone numbers were actually correct. But, surprise, surprise, in a matter of less than 6 months all of this data was on Google Places. At the time I was actually telling my boss: "hey! at some point the EU is bound to do something! They cannot just rip people off like this". It "only" took the EU ~6years.
To be more specific about my case, I wanted to import into OpenStreetMap the latin names ("romaji") of places from Wikipédia. But I had to check if it was allowed around the world. I read that in Australia it is not a problem, but it is hard to know about the rest of the world.
Instead it's a contract with a nondisclosure clause, and contracts only bind the participants.
It's also not a trade secret, with access being sold so openly.
They just didn't do the groundwork.
And I'm sure copying maps is illegal.
Place information? Hmmm. Maybe it should be too.
You can't directly copy the artistry, things like label sizing and placement, but you can copy every road and city.
See also https://en.wikipedia.org/wiki/Trap_street
>I didn't say it was illegal.
I'm not commenting directly on the legality. I'm trying to refer to the deeper reasons that lead it to be legal. If it's truly ripping someone off to copy facts that they painstakingly collected through their sweat of the brow, why is there a specific exemption from copyright?
What Yelp wants, is to have their cake and eat it too. They want to benefit from what Google offers, and they want Google to behave exactly as they would prefer, assuming control over Google's product through government power. Classic competitor hypocrisy, the same behavior displayed 15 years ago by Microsoft's extremely envious competition. They didn't want to beat Microsoft in consumer operating systems, they wanted to chain and control Microsoft's operating system to their benefit.
Suppose someone launched an 'Encyclopedia Search' service that searched Wikipedia, Encyclopedia Britanica, etc and linked to their sites. The the service then started loading the Wikipedia and Britanica content into it's own respository and linked searches to that. It's still searching the same data, and taking you to the same articles, it's just that now you're not going to Wikipedia or Britanica anymore. Would that be ok? If not, what's the difference?
Using a dominance in search to scrape data from competitors for use in other services and then link to them from search in preference over the data's source may well be anti-competitive, even if the scraping itself isn't illegal.
That would be true if Google didn't have an effective monopoly in search. Because it is an effective monopoly, saying that about Yelp is like saying a citizen that is against any form of socialism but cashes social security checks wants to have his cake and eat too. False. That citizen would prefer that social security doesn't exist, but given that it does, and given that he is forced to pay the costs, isn't going to be stupid and refuse the checks. And I say that as a free-market socialist.
There are two ways to deal with a monopoly:
- break it up
- allow it to continue, but force it to provide equal access, at non-monopolistic rates and terms
Yet in one case (general search) Google has a very large market share, whereas in the other case (e.g. product search), there is still plenty of competition with for example Amazon holding some share of that market. The idea is now that while it’s ok for Google to have such a large market share, it’s not ok for them to use that share in order to get another large market share which they don’t have at the moment. I.e. it’s acceptable for them to have a near-monopoly, but not to use that monopoly to build a second one.
The thing is, if what Google displays as "the most relevant X" is always or predominantly or even merely often a Google site, rather than what is actually the most relevant X, then Google is abusing their dominant position to create advantage in related markets. I do agree that the failed 2014 deal was a piece of crap.
I fundamentally don't believe the rules should suddenly become different when you become sufficiently successful. There's no size threshold above which you ought to have to listen when everyone wants a cut. Now, if you're colluding to suppress other products that are actually better, that's a different matter; that's wrong no matter how big or small you are. But that's not what we're talking about here.
And I say that as someone who uses DDG for search, and voluntarily chose to switch for a variety of reasons.
The problem is the definition of what are 'facts'. Are birthdates? Are consumer good prices? Are classified postings? Airline flight times?
But my experience in a baker-shop can tell you everything on the european attitude towards technology. "So what are you doing for a livin?" "I work as a software developer.." "Oh, so your company doesent produce anything real?"
You cant force a culture to embrace something new that it detests. This doesent mean that this culture will not buy the products, but it will never produce them on the level as californium.
Another example? People pay ridiculous amounts of money for public television in germany. And it is bad. Outright horrible. Not regarding production quality, not the acting, execution and direction. Then what is missing to create a german game of thrones? The answer: A diffrent production culture, that doesent view half a hour of screaming drama as a authentic drama, and understands that a joke on the henchmans axeblade makes drama so much more impacting. Will that change come? No. Cultures only adapt when they suffer and europe is not suffering enough.
Not only are we many different countries, but we are also different individuals. There is no common "European attitude towards technology".
The euros are real
However, another plausible position is that Google is merely behaving negligently. There are some studies (paid by competitors, sure) showing users dislike Google promoted content and products. Those products should probably have their A/B tests ended, but nobody has the guts to pull the plug (and willpower to evolve the effort into something else). Knowledge Base has sucked away ~30% of Wikipedia's traffic, which thankfully has not yet hurt donations. Google certainly doesn't want Wikipedia to fall apart.
If we want to draw a parallel to Microsoft's monopoly, we could point out how IE was initially a good product but then fell behind the competition. Pushing it on consumers not only hurt consumer choice, but (over time) locked users into a poor experience. But did we really need to carry out a lengthy (and ineffective) anti-trust case?
Building a legal case is expensive and highly political. If discovery doesn't uncover evidence of malicious intentions, then one must prove competitors and consumers were harmed. But if the monopoly has been held for so long, how can one prove those damages without resorting to small, expensive, and contrived studies?
We should begin to embrace an expectation that the producer of any successful product will eventually become negligent. Protecting consumer choice is not just about fair discovery, but ensuring the diversity needed for markets to evolve (for better or, perhaps in the short term, for worse). Why do we have to go to such effort to show how Google is specifically doing harm? Why can't we say they had their turn, and here are places where they have concentrated marketshare and thus places in need of diversity?
The fallacy with the EU's position is the notion of 'diversity'. Code word for "let our companies compete better". If the free market doesn't want that, any 'remedy' will in fact harm users. What the EU must do is simply focus on the question, "are consumers harmed". Anything else is begging for problems. EU bureaucrats are not smarter than the market. If EU companies are able to attract the capital and users to them, wonderful. But the fundamental problem is 'attracting capital' to a rigid (and apparently protectionist) market.
For one example, Google started showing results linked to G+ while not showing superior results from Twitter. That looked like an open-and-shut case of Google using its search monopoly to promote one of its own properties to the disadvantage of a rival. I really don't think it counts as negligence...
> IE was initially a good product but then fell behind the competition. Pushing it on consumers not only hurt consumer choice, but (over time) locked users into a poor experience.
I'm not sure there is a useful analogy with the Google case.
However, IE6 was initially a good product and fell behind out of neglect. That was partly because Microsoft didn't do a new browser until it did a new OS, and the new OS -- Vista -- was (a) delayed and then (b) unsuccessful. Mistakes were made, as they say.
The point is that Microsoft wasn't "pushing [IE6] on consumers". Microsoft was desperate to get consumers off IE6 and XP, but consumers (and businesses) didn't want to move.
Either way, Microsoft's mistakes left the door open for Firefox and, later, Chrome. The anti-trust action didn't solve the problem -- and it didn't help Netscape, which started it. The market solved the problem by creating better browsers.
It is not "customers over workers" it is "customers over local corporations with less developed products". Google has offices in 40 different countries (https://www.google.com/about/careers/locations/). Workers could easily go work for Google without moving to America...and Google offers some of the best, most competitive career prospects of any company. Until this changes, there is no reason to presume that Google's behavior in Europe is somehow hurting "workers."
Sure, if Google was providing inferior products, and paying its workers lower-than-market salaries and abusing its dominance to keep better products out of the market, then all of this fuss would make sense. Fear of this happening at some point is not, in my opinion, a good justification for such heavy resistance to Google's activities.
We shouldn't confuse the interests of local (i.e. European) corporations with the interests of the people. It being harder for a Danish company, for example, to enter the online search, mapping, or shopping market doesn't mean it is harder for Danish people to work in online search, mapping, or shopping. It also does not mean it is harder for Danish people use high-quality products in these industries. I don't see how Google's actions so far constitute "abuse of dominance" even if you take a protection-of-workers stance...only if you take a "protection of the local corporate CEO" stance.
But today I'm afraid Europe suffers memory loss.
They're using coercion against another country (always the same one, the USA) for ideological reasons... which is the very definition of war.
The fact they're citing money as the reason only makes it more frightening. Prosperous countries avoid war and favor trade instead, if possible.
As a European citizen, I can witness the anti-american mindset: it's growing, nurtured by press and politicians. Don't think "it's not the USA, it's Google/Amazon/Apple/Microsoft/Facebook": they actually cite the USA all day long until Google is a synonym for the USA in people's mind.
A quick check with the first article I can find in my Google newsfeed: in the french press, about Apple Music, the article starts with "Le géant américain de l'informatique Apple" (The american IT giant/behemoth Apple)
The internet is an amazing promoter of free-trade, so unsurprisingly it's the perfect target for Europe.
Please don't call it a conspiracy theory: it's not one, because I hope I'm wrong ;-)
Trade makes everyone better off, in general, but is risky, because policies can change. Free trade in particular gets even riskier as it means the populace has fewer levers of influence against the corporations. Canada is experiencing this with auto manufacturers - many Japanese and American (some German) companies build cars in Canada and Mexico for the broader North American market because of North American free trade and lower labour costs in both countries (the exchange rate, single payer health care in Canada, more reasonable unions, etc). But now so many jobs depend on these companies, the Regional Governments can't let them leave in economic downturns. So they subsidize. Is this all a net positive? Probably, but it's hard to know.
When you accept the upside of trade you need to accept the downsides - but most don't. "Let the free market choose" isn't an answer because we live in a Democracy, one feature of which is to prevent the market from getting what it wants when the people don't like it.
The USA dominates technology with only a few counter-examples in Europe (SAP, Amadeus, ASOS) - but LOTS in China. If the future is going to be these companies diversifying into every other market ("software is eating the world") you can bet there's justifiable anger at the U.S. (At beating them in a new area of knowledge and practice) and a desire to put up barriers while they get their shit together as China did.
This isn't war, it's competition. There's a big difference.
When Europe says "we'll fix what's wrong with Google", do they want to convert the last 10%?
If not, then it has nothing to do with the people.
You think democracy is what protects people against companies? How strange. If there's no demand for a lousy french dropbox-like service, and people use Dropbox instead, it's because the market will give people what they want: they chose Dropbox.
Now pass a "democratic" law to ban Dropbox because it's not hosted in France, and all we're left with is the opposite of democracy. No choice anymore, and the best product is gone. Who's winning? The french dropbox-like with its new state-guaranteed monopoly. The people has lost.
A french comic once said "So you're telling me the rich are bad, and the poor are good, and all these good people want to become the bad ones?"... I mean the french "dropbox-like" would love to be Dropbox. The french Uber like would love to be Uber. Exalead would love to be Google. But it's not the good vs. the evil.
It's just a matter of performance... until the law comes into play, in less than democratic ways, to cut competition.
No, that's not democracy, that's a free market. There's a big difference: democracy is about electing representatives to pursue your preferred policy goals. These goals may or may not support personal or economic freedom. One might want to use a service on the free market and at the same time want their elected representatives to constrain its competitive strength to enable local competition. Mainly this should be done in the interest of consumers or it gets too distortionary. I'm not claiming Google harms consumers, I'm just saying that (for example) Google has massive negative implications on privacy which are concerning.
"Now pass a "democratic" law to ban Dropbox because it's not hosted in France, and all we're left with is the opposite of democracy. "
Actually, no. What you're left with is a democratically elected government that is closing their trade market somewhat in favor of other interests.
Note, nowhere did I suggest it was a good idea to ban a company from trading with a country. That would be a bad policy unless there was a very strong reason and popular support. Constraining behavior, on the other hand, might or might not be a bad policy. Hard to know.
"It's just a matter of performance... until the law comes into play, in less than democratic ways, to cut competition."
I agree the free market and free enterprise is all about performance and results, and the law doesn't care about such things. But that's why democracy exists - sometimes efficiency and performance is NOT what the populace wants. They want change and competition to be slowed by laws and regulations. People do not respond to change as quickly as the markets sometimes want them to.
All of this are just policy differences between laissez-faire free market and more socialist policies. They have their tradeoffs but are both legitimate (one is not more "democratic" than the other).
And this mindset of "it works well enough" now meets with the US mindset of wasting resources, of eternal, aggressive growth, of pure capitalism.
Obviously, that doesn't work well.
Regulations are not trying to fix "what is wrong with google". They are trying to keep the competition going, which ideally results in a better product for the consumers.
Also, Google is not a monopoly. There are plenty of alternatives (Yahoo/Bing/etc). Google is not even trying to buy them.
As for the retribution of newspaper headlines. This might be some form of protectionism.
Calling Bing and Yahoo an alternative to google honors them. Just try them both exclusively for one week and see if you would really call them that.
Whether they are a monopoly (or not) is not really relevant. Monopolies aren't even prohibited per se.
But Google most certainly are in a dominant market position, and under EU competition law that means they must not abuse that dominant position.
The most recent anti-trust/cartel activity is listed by the European Commission for Competition:
http://ec.europa.eu/competition/elojade/isef/index.cfm?fusea...
http://ec.europa.eu/competition/cartels/cases/cases.html
Currently that covers: something about pay-TV in UK/Ireland, Qualcomm, a bunch of European cargo train operators, a pan-European retail food packaging cartel, something about a Bulgarian Energy Holding, German car heating and climate control vendors, Amazon, SkyTeam.
Of these, two are American (Qualcomm, Amazon), one has a US company involved (Delta Airlines as part of SkyTeam), everything else is EU internal.
That doesn't look like coercion against another country ("always the USA") to me.
I guess there are two reasons why the media is mostly covering the cases where US companies are involved:
First, the big tech companies are mostly American. Being big brings you on the radar of both regulators (everywhere) and the media covering the industry.
Second, EU tech media takes cues from US tech media. When the US media report on something (such as a potential problem for the international business of their local industry), EU tech media pick it up.
Up until today I haven't heard about the retail food packaging cartel, but with a €115M penalty that must have been a bigger issue. But why should HN (and related media) cover that? They're no household names, so it's also not covered in the general press. But I'm quite certain that the trade press of the retail food industry will cover this in great detail.
But please note that it's not just anti-trust cases, but also privacy cases / right to be forgotten / partnerships with newspapers / etc...
When the NSA scandal was everywhere in the press, Orange (french telecom operator, former public company) said there was no need for the french administration to spy on them because they were already cooperating outside the judiciary system everyday. Yet the headlines were not about the French administration spying on its citizens, but about the NSA and the risks you take by using Facebook.
That's so pathetic. Now the French government has passed a law to make it easier to spy on its own citizens. And the UK is following not far behind.
That's just what the media needs to do to keep getting interviews with high ranking politicians.
I doubt that the approach is to try to hurt the US, but to limit the impact on domestic relations to public officials.
As for Facebook, that's one of the things that users _can_ do something about (however little the impact of such action is). If there were a French Facebook, the same could apply there as well - but besides Daily Motion (which is public by default), what is there in France where people could adapt their behavior?