Those who cannot innovate, regulate. Or so the European Commission again seemed to indicate, levying a truly Google-sized €2.4bn fine on the search engine giant for purportedly showing its Google Shopping results above its unpaid search listings.
We’ve seen this Brussels/Google movie before, and with depressing consequences. In 2014, Axel Springer, a German publisher, insisted that Google stop violating its copyright and cease showing snippets of its content in the Google News service.
Google complied and, by Axel Springer’s own report, inbound traffic fell by 80%, forcing it to rescind its complaint.
Spain had an even tougher time of it. Shortly after the German fracas, a Spanish lobby group convinced the government to pass what amounted to a link tax, forcing Google to pay for the privilege of driving traffic to Spanish publishers (something most publishers would gladly pay to have).
The company decided to simply pull out of Spain, causing a steep decrease in “eyeballs”, and eventually the same lobbying group clamoured for Google to return.
Despite initial appearances, the most recent court case is not a battle between a heartless American tech behemoth and some European small e-commerce retailer (many of whom are very content to sponsor their product listings on Google) but between two flavours of middleman.
One, Google, has invested billions in – and profited by many billions from – its market-beating search technology. The second – and chief complainant in this case – is a (long since non-operational) “price comparison” company.
Foundem, started a decade ago by a Berkshire husband-and-wife team, scrapped product listings and descriptions from the wider web and via its own intermediary website allowed navigation to other third-party merchants.
It was window-dressing on the real business of online commerce, but window-dressing that could turn a profit, if done well.
How could the EC possibly take Foundem’s side in imposing its walloping fine? Under the rubric of anti-trust laws, the EU is treating Google like a public utility whose conduct is regulated not for the benefit of its shareholders but for that of society and other online players.
This despite Google having had to defend its dominant position from Microsoft’s Bing search engine and smaller upstarts for years on end.
Brussels has even had the cheek to suggest that Google’s search algorithms, the very keys to the search kingdom, be regulated by law, and issued a €10m tender for some company to help it to do so.
The thought that bureaucrats, most of whom have never run so much as a blog, will suddenly be responsible for understanding the complexities behind the world’s internet navigation technology is absurd.
While I have never worked at Google, I did work at Facebook as an early employee on its advertising team . Facebook updated its vast computer code empire daily when I was there, and reputedly does so three times a day now.
Striking, red-lettered posters with the thundering exhortation “Move fast and break things” adorned many a wall. New employees were urged to improve Facebook on their first day, and given the technical tools to do so. Google’s corporate DNA, or that of any Silicon Valley company, isn’t much different.
Such a company will never willingly submit to the regulatory regimen that the EU is suggesting, as it represents an insufferable brake on innovation.
Google will simply pay what fines it must, and if the company is ever backed seriously against the wall, it will just pull out of the European market, as it threatened to do in Germany and did in Spain.
As the computer scientist Alan Kay once said: the best way to predict the future is to invent it. Ditto, the best way to control it. To date, other than a smattering of hits such as Soundcloud or Spotify, Europe has yet to produce a single consumer internet company of global scope.
The same system that seeks to regulate tech giants seems curiously incapable of creating one.
This former Silicon Valley techie (and EU passport holder) would encourage the commission to forget about digging into Google’s search algorithms, and instead figure out why a common market with more than 500 million inhabitants has so missed the internet entrepreneurship bandwagon.
Then perhaps one day busybody American regulatory organisations will be fussing grumpily about the market dominance of European tech companies, and jealously issuing huge fines.
