Rules in Cyberspace: Preventing International Conflicts

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The Google Case: Abuse of Market Dominance or European Protectionism? 

“The European Commission (EC) has announced a new Digital Single Market Strategy and has to make a choice between two approaches to the Internet; a forward-loo- king, market-driven path or a backward-loo- king defensive retreat,” James Waterworth notes (“Which Internet for Europe?” -Project Syndicate-).

While Europe has grappled with its macroeconomic woes, the US and Asia have raced ahead, but it needs to embrace the Internet, even where it is disruptive.

The EC should:

1) Remove barriers and update the regulation that protects existing business models

2) Guarantee non-discrimination. Unfortunately, France and Germany are rolling back the progress of the digital economy by calling for beefed-up regulatory powers to rein in powerful, usually American platforms, such as Google, Facebook, Uber and Airbnb.

“The wisest choice would be to ensure that many more successful Internet firms emerge, by creating the best possible conditions for digital innovators,” Waterworth concludes (PS). “American tech companies are under unprecedented attack by European Union regulators,” Philippe Legrain claims (“Germany v. Google” -Project Syndicate-).

The EC has charged Google with abusing its near-monopoly over Internet search in the EU to favor its own shopping services and is calling for an investigation of the role of (mostly American) Internet plat- forms, such as social networks and app stores. The key driver is the lobbying power of protectionist German businesses. Germany’s digital start-ups are stifled by overregulation and underinvestment.

German companies are not alone in fearing American competition, but their influence within the EC is decisive. “Germany should make it easier to start and expand Internet businesses, and boost investment in broadband infrastructure and digital technologies,” Legrain recommends (PS). “Google, the US government and others accuse Brussels of thinly veiled protectionism because of its allegations against the tech giant Mountain View.

But there is another side to the story, which is that Google’s chief complainants are US companies,” Edward Luce tells us (“Big Data’s infinitive harvest” -Financial Times-).

Google has been described as a benign monopoly because of its breakthroughs and the data industry’s low barriers to entry, but Yelp, Microsoft, Expedia and others have complained both to Brussels and Washington.

Brussels has a tougher competition regime. “In exchange for free services: social networking, emails, videos, search and satellite maps they are building our profiles in ever more granular detail, teasing out our preferences. We are not Big Data’s customers, but its product,” Luce emphasizes (FT). 

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Luis Gallardo
Luis Gallardo
Luis Gallardo is a global brand and marketing leader and expert in the areas of strategic brand management, brand engagement, brand expression, marketing, communications, business development, and reputation management. Former managing director of global brand & marketing at Deloitte, Luis provided leadership to Deloitte's member firm network of more than three thousand marketing and communications professionals. Author of the book: Brands & Rousers, The Holistic System to Foster High-Performing Businesses, Brands and Careers. Luis is the founder of Thap Group, a multinational consultancy focused on brand, marketing and communications strategy, and he sits on the advisory board of several high-growth organizations.

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