Google and the EU referendum problem

At a recent policy discussion hosted by the Think Tank Demos, panelists discussed their concerns that the governments and political institutions like the EU are not equipped to deal with the “future of the internet.” In particular, Eva Pascoe, Co-Founder of Internet think tank Cybersalon, explained that companies like Google have essentially taken on the role of sorting out problems on the internet because governments simply can’t keep up.

 

Until March this year, the Internet Corporation for Assigned Names and Numbers (ICANN) was nominally an American government led organization who were “in charge” of the internet. In doing so, ICANN has agreed to effectively cut ties with the American Government oversight and move towards a globalized “Multistakeholder” model of governance.

However, as Pascoe explains ICANN’s decision to give back control to governments is effectively a symbolic gesture. Looking at the example of spam, Pascoe explains “it has essentially been solved by Google, not by ICANN, and certainly not by any government.”

Technology giants such as Google and Facebook have increasingly embraced their role as private service providers – addressing for their users issues which are not being curtailed by governments. It is in this capacity that the most recent front in the battle over control of the internet has opened up.

Europe’s Competition Commissioner, Margrethe Verstager, has recently levelled ‘antitrust’ charges against the technology giant, Google, claiming that their Android operating software is harming “consumers by stifling competition and restricting innovation in the” market.

In order to have a “competitive mobile internet sector,” Verstager said, it “is increasingly important for consumers and businesses in Europe” to have access to an open, fair market.

“Based on our investigation thus far,” she adds, “we believe that Google’s behaviour denies consumers a wider choice of mobile apps and services and stands in the way of innovation by other players” which is “in breach of EU antitrust rules.”

The Commission has accused Google of breaking “antitrust” laws by: “requiring manufacturers to pre-install Google Search,” “preventing manufacturers from selling smart mobile devices running on competing operating systems,” and “giving financial incentives to manufacturers” to “exclusively pre-install Google Search on their devices.”

Google’s European Executive, Matt Brittin, suggested that if the EU were to make the company’s life too difficult, China could offer an alternative market with less hassle.

Brittin explained that “if the services and products they are using are not made in Europe then they will be made in China, and Asia-Pacific and Silicon Valley, and that will be a big missed opportunity.”

Analysts on both sides of the impending EU Referendum have expressed concerns over the Commission’s ongoing battle with Google.

Diego Zuluaga, Financial Services Fellow and Head of Research, at the Institute of Economic Affairs, commented that the Commission’s complaints against Google “would be justified if Android were a monopolist and its contractual arrangements with manufacturers were preventing users from accessing competing apps.”

However, as Zuluaga explains currently “manufacturers can choose how tightly they wish to integrate their devices with Google’s software.” Offering the examples of Russian, French, Chinese and Finnish companies “running Android on their phones without Google apps.”

Zuluaga continues to say: “the Statement of Objections would be less concerning if we knew it wouldn’t have major consequences for future competition in the digital sphere. Yet, “by casting doubt on the legality of Google’s arrangements with manufacturers, the Commission may well chill innovation and harm end users, who are really the people competition authorities should care about.”

He concludes by saying that “all in all, this is a mistaken move and bad news for the Digital Single Market.”

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