EU competition chief holds threat of breaking up Google
telegraph.co.uk
telegraph.co.uk
The step to remove Google dominance is to find, create and nurture alternatives. For example, I started using Fastmail. I'm using some of Apple products like the Calendar and Notes. I'm using Skype for communication.
So I'm diversifying a bit though they can engage in data sharing. This reduces the monopoly power of one single entity.
Blocking Google, Facebook or another big provider will not work and if it did, it can have severe consequences. Most people (and politicians) are ignoring the massive productivity benefits that Google search is bringing. It can be used for evil, but the productivity it brings is paramount.
You can't fight Google by blocking it or destroying it. There is a reason that Google is huge: It is magical and there is no usable alternative.
To remove Google monopoly you did what Google did for Yahoo or Bing: You build an alternative. It is possible to have multiple alternatives for search like for email or smartphones (though we have only two).
The reason we don't? Google won. Android/iOS won. Linux/Windows won. Everybody gave up and just accepted it. Now everyone is screaming of "regulating" these guys. Trust me. This how you get closer to your demise (politicians and current day governments) than to their demise.
IMO is not competitive to have Google with it's advertising money get involved in 10 or more different activities and killing the companies that were or would have appeared there just because they have money and can run without profit.
I, similarly, use Apple Maps more than Google Maps now, Messenger or iMessage more than Hangouts, and don't feel like things would be too terrible if I had to go further into Outlook.com or iCloud instead of Gmail/Calendar... Google's versions are better but not in a way that seems magical or impossible to replace (from my experience with my work email/calendar in Outlook).
Until Google's search results page for what you want to do decides to "promote" Google's own solution and "penalize" the competitor.
Which is something Google already does. They claim to have only the best and purest and most angelic of intentions, but the result is still strongly anti-competitive behavior and makes competing with Google a task that ranges from merely "obscenely difficult" all the way up to "actually impossible".
The step to remove Standard Oil dominance is to find, create and nurture alternatives. For example, I started buying petroleum from a small independent refiner. I'm using some of Royal Dutch Oil Company products like their lubricants and ointments. I'm using whale oil for indoor lighting.
So I'm diversifying a bit though they can engage in price fixing. This reduces the monopoly power of one single entity.
Blocking Standard Oil, Royal Dutch or another big provider will not work and if it did, it can have severe consequences. Most people (and politicians) are ignoring the massive productivity benefits that Standard Oil is bringing. It can be used for evil, but the productivity it brings is paramount.
You can't fight Standard Oil by blocking it or destroying it. There is a reason that Standard Oil is huge: It is magical and there is no usable alternative.
To remove Standard Oil monopoly you did what Standard Oil did for the Cleveland or Pittsburg cartels: You build an alternative. It is possible to have multiple alternatives for oil like for steel or railroads (though we have only two).
The reason we don't? Standard Oil won. Carnegie Steel won. North Pacific won. Everybody gave up and just accepted it. Now everyone is screaming of "regulating" these guys. Trust me. This how you get closer to your demise (politicians and current day governments) than to their demise."
In telecommunications, the Baby Bells are doing just fine after the Bell Telephone Co. was broken up. They're just as monopolistic, price fixing, and destructive to privacy as ever.
And they are mostly back together again, too.
Yes, it took a long time to break up Standard Oil, leaving plenty of time for the Rockefellers to amass wealth. What's your point?
Someone much smarter than me would likely have to determine whether stockholders benefit more from a split up company that can do business in Europe, or a unified company that can't.
With 6 weeks being the required notice before everyone is laid off or whatever.
Google has a strong position in the email space, but it isn't anywhere as dominant as it is with search and web advertising.
What?? The whole point of a breakup is precisely because they are dominant in all of the things you mentioned. Also, my comment is irrelevant if they actually comply with a breakup order. If they don't, and they withdraw from the EU, it doesn't matter how the breakup is structured because they cease doing business in the EU anyway.
[1] https://www.theguardian.com/world/2014/dec/16/google-news-sp...
[2] https://techcrunch.com/2014/12/14/spanish-newspapers-want-go...
Everyone there uses a local alternative and doesn’t give a fuck about Google anymore
which is also why Google was fine with leaving China
EDIT: I guess I didn't mean "what if Google was forced to do this overnight?", but rather I meant more like "couldn't Google make this backfire by doing this overnight?".
Good luck finding somewhere else you can reimport that and continue working. It might as well be an encrypted blob.
Legally speaking, I'm sure there's plenty of ways the EU can force Google to do things it currently does not want to do.
I'd say the EU has lots of negotional angles currently to win things from Google. That is kind of what you get when you have more or less universal legislation power over 40% or so of the world's purchasing power (please correct me, I just bullshitted that guess). And that, alas, was also a large part of why the EU was born. So now we'll will reap the benefits.
If I could say anything to our EU negotiators in this case, it would be: stay brave.
Europe GDP is 20.9 Trillion USD. The world GDP is 107 Trillion USD. So Europe is only 20% of the world GDP.
But one can make the argument that EU citizens are better connected and spend more on digital goods. Though I'd be surprised if it drives more than 30% of Google revenue.
EMEA, APAC, Other Americas, US
Out of this, in 2017, EMEA was 32.5% of total revenue, based on numbers from page 33 of https://abc.xyz/investor/pdf/20171231_alphabet_10K.pdf.
My bullshit-guess is that out of those 32.5 percent units, EU/EES was responsible for about 31 units or so, and the rest 1.5 was from the middle east and africa. (Reasoning: the ME certainly has money, but no population to speak of. Africa has lots of people but besides relatively tiny South Africa very little revenue for Google.)
So yeah, the EU has a pretty powerful hammer.
Unless you stop people from just heading to the top search engine in the world, they'll keep using it.
This didnt even work when it was simply a question of having transnational companies on the level of facebook having to pay taxes.
E.g., seizing Google’s copyrights and patents, and selling EU usage rights for them. Or seizing the physical hardware, and selling them (and the software on them) off.
There’s many many solutions here.
In the past, european governments have already seized airplanes from airlines upon landing, and threatened to auction them off, to pay a single unpaid $500 ticket return fine.
The retaliation from the US government on that one would be pretty epic. I wouldn't want to be an owner of a patent heavy European company at that point. Our current President is quite familiar with eminent domain.
The EU can also disallow sales of Google's products, like any android phone. Or products like the chromecast, and don't forget Nest and Google Home.
And selling ads in Europe from a foreign country isn't too easy either. It is a lot harder to do business with a company which is on the other side of the ocean, and officially doesn't have a precense in the same economic area.
If Google leaves all of that behind in Europe, and is not really allowed to do business in Europe anymore, soon enough there will be a competitor that stands up and can do things better. Especially if they can actually open offices in Europe and do business without major hurdles.
> The EU can also disallow sales of Google's products, like any android phone. Or products like the chromecast, and don't forget Nest and Google Home.
Without giving them plenty of time to pullout? This will probably trigger panic across of the multinationals.
These things take a long time. Google was abusing its search monopoly before the EU started a seven-year investigation that resuled in a $2.7 billion fine ... which it is now appealing.
Google settled with the US in 2013. It agreed to change some of its search practices and got away without a fine.
I'd be surprised if Google didn't know it was abusing its search monopoly. I'd assume it calculated that it was more profitable to keep doing it until compelled to stop.
Either way, a seven-year investigation provides plenty of time to prepare for exit strategies, if required, and it would grossly incompetent not to have prepared for them.
Google currently has a monopoly for search, email, maps (and many other services which I care less about) it is crazy that we allowed it to happen.
It's not too far fetch that Google pretty much owns the internet. If Google blocks you or your company you might as well not exist.
There never should be a single entity that has so much power.
For a company that benefits from network externalizes a much as Alphabet does, revenue alone is not good measure of market importance. Losing one market means that market share in all markets is threatened and company growth is in peril.
In practice EU probably will not explicitly demand company break up. They wold create conditions that effectively break up the company inside EU. It's up to the owners to decide how they arrange it in the practice.
First Alphabet might have to choose what its main business is (= search) then all other businesses and services are separated from the search into different entities when they operate inside EU or serve customers inside EU. This would include Google Play, Youtube, Android, user accounts, ad placements, and ad sales generated from the EU.
This would break the platform synergy. Negotiators might leave carrots that make it easier for Alphabet preserve it's stock valuation if it rolls over and yields to most demands.
I wonder if this contributed to Eric Schmidt leaving.
Really, I'm all for symmetry with stuff like this if that is what it takes to get these giants to at least attempt to comply with the law.
What would symmetry look like from the US side if the EU starts demanding Google be broken up? Unfortunately the EU has no massive, powerful technology businesses to demand be broken up.
So?
If it had then most likely there would be a similarly strong push to break up such a company if it misbehaved. At least, I would hope so.
Microsoft got very lucky with the change of party in charge, they were about to be broken up in the US into 'apps' and 'os'.
And that's a good punishment for companies that use the fact that they have their fingers in completely different pies to stifle the competition.
Breaking up VW would not accomplish much in that sense.
Maybe because the EU has working competition laws, so EU companies rarely tend to hold a monopoly in dozens of independent markets?
I mean, that’s the basic issue here, isn’t it? The US hasn’t had effective antitrust regulation for decades, which is why Google ever could grow to this size in the first place.
Honestly, this sort of thing is often thrown around as a trope and I don’t think it holds much water.
If you create a startup in SV, you can easily sell to the whole US.
In the EU, you’ll need to obey 28 different laws, 28 different standards, and file 28 different tax forms. This is currently the single biggest hurdle for startups in the EU.
The second, of course, is that people seem less willing to throw billions at risky concepts just so one maybe gets big enough.
Different social attitudes to risk, and a language barrier, are no doubt much more pressing concerns.
All these can be potential roadblocks that make it harder.
In the EU, VAT compliance can definitely become an issue, especially with small projects.
Not so much an issue for VC startups, but definitely one for bootstrapped ones. The only way to get a large enough market to survive is to sell to the entire EU, but that means much more work with VAT compliance, and translations.
The real difference is that the EU and it's member nations actually enforce their regulations and don't let situations happen like Uber/ISPS/AirBnB just ignoring laws until they had enough money/influence to force changes to the regulations
I mentioned this in a sibling comment – a good example is the EU enforcing VAT laws actually, vs. in the US many online stores simply being located in a state without sales tax and not paying any in the state where the customer lives either.