{"id":3864,"date":"2017-07-05T19:26:17","date_gmt":"2017-07-05T17:26:17","guid":{"rendered":"http:\/\/www.euroresidentes.com\/empresa\/innovacion\/?page_id=3864"},"modified":"2017-07-05T19:29:51","modified_gmt":"2017-07-05T17:29:51","slug":"europe-against-google-or-the-route-towards-the-abyss","status":"publish","type":"page","link":"https:\/\/www.euroresidentes.com\/empresa\/innovacion\/europe-against-google-or-the-route-towards-the-abyss.html","title":{"rendered":"Europe against Google (or the route towards the abyss)"},"content":{"rendered":"

The analysis of the arguments given by the European Commissioner for Competition, Margrethe Vestager, on the \u00ababuse\u00bb by Google\u2019s search engine of its dominant position<\/b> in relation to its \u00abcomparison shopping\u00bb service, is cause for concern, and great concern, for that matter. \u00a0\u00a0We\u2019re talking about an unprecedented fine of such an amount that it would require solid arguments and a certain mastery of the digital medium<\/b>. \u00a0There is no evidence of either one.<\/p>\n

What the Commission\u2019s decision actually shows is that we are faced with a Europe that has a hard time understanding the world of the digital economy<\/b> and that, instead of focusing on building a solid and ambitious digital strategy that may be worthy of such a name, it is fixated on enabling an opportunistic and sterile \u00abanti-technological-giants\u00bb crusade<\/b>.<\/p>\n

For whom does the European Commission wield the sword <\/b><\/h3>\n

First and foremost let me express my respect for any digital project and the legitimate defense of its interests, but if Europe\u2019s digital future (as highlighted by the Commission\u2019s revelations and the amount of the fine) lies in developing \u00abprice comparison sites\u201d,<\/b> the future looks bleak.<\/p>\n

\"comparadores-de-precios\"<\/a><\/p>\n

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My experience and approach to price comparison services <\/i><\/b><\/h4>\n

We were a \u201cprice comparison\u201d service once. Quite a few years ago, we developed at IT&IS a price comparison tool for products sold in supermarkets. To achieve this, we \u201chacked<\/b>\u201d \u2013I use the actual jargon on purpose – (i.e., we indexed, we collected Google-style) prices \u201cowned\u201d by the stores.\u00a0 At no time did we think the project\u2019s viability depended on Google.<\/p>\n

And it never occurred to us that it was not legitimate for Google to \u00abcollect\u00bb and offer that same information (compare prices) in the way that was most useful for its users. Both Google and the \u00abprice comparison sites\u00bb are using information from third parties<\/b>. This should be made clear.<\/p>\n

We always thought that if Google were ever to offer this kind of price comparison, the product stores (the owners of the price information) would be much happier than if we were the ones that offered it.<\/p>\n

We were certain that the only possibility for surviving was to offer additional services of real value to the user<\/b>, far beyond a simple price comparison: apps, features, shopping lists, services, etc. In my mind, it would have seemed Kafkaesque to require Google to provide advantages to our visibility in its search engine over actual visibility to the owners of the goods (supermarkets or owners who rightfully deserved this visibility much more).<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

And why are price comparison sites in Europe relevant?<\/b><\/p>\n

Europe\u2019s digital problems is that, in a fragmented market, instead of developing \u00abunicorns\u00bb or start-ups with capacity to grow globally<\/b> and with services that represent a great value for the user, we\u2019ve generated marginal companies<\/b> whose only viability is centered around \u201cGoogle\u2019s positioning\u00bb. \u00a0Some even engage in vulture-like practices, with dirty fights among themselves.\u00a0 For example, there are those who practice negative SEO, or encourage parallel practices in social networks to negatively affect the corresponding algorithms.<\/p>\n

The European Commission should be concerned about having a\u00a0fabric of European digital companies that only aim to live off Google\u2019s \u201ccrumbs\u201d<\/b>\u00a0and whose value proposition for the user is so irrelevant that they don\u2019t seek to consolidate \u00abdirect traffic\u00bb and exist in their own right.\u00a0 In the subject at hand, what the Commission should be worrying about is why, at this stage in the development of online commerce, there is still no European Amazon or Alibaba<\/b>.<\/p>\n

Any company that has followed Google in recent years knows that their searches have developed an exponential innovation<\/b> around personalization, big data and Artificial Intelligence.\u00a0 Searches and their algorithms are currently very complex, dynamic and are increasingly more individualized. Surviving on positioning, or long tail<\/i>\u00a0or SEO is becoming more and more difficult, if not outright impossible. It makes no sense as a medium-term strategy.\u00a0This immersion in exponential innovation forces us to reinvent ourselves permanently.<\/b> And this includes \u201cprice comparison sites\u201d.<\/p>\n

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Technical annex:\u00a0 the complaint \/ fine<\/h3>\n

Without taking into account the remarks mentioned above, the Commission\u2019s resolution doesn\u2019t have a leg to stand on:<\/p>\n

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  1. The Directorate General for Competition has not understood that Google’s ads do not link to Google’s price comparison service (as reflected in its claim) but go directly to advertisers’ websites, taking users to sites where they can buy what they are looking for. Therefore, it destroys one of the assumptions for the \u00abfavoring\u00bb. And it forgets about the importance of the service received by advertisers, as European as the \u00abprice comparison sites\u00bb<\/b>.<\/li>\n
  2. A fine based on an abuse of Competition would require the Directorate General for Competition to clearly identify the \u201cdamage\u201d<\/b>. Not only does it seem to have doubts and important conceptual errors in this regard, but its arguments also show significant confusion.<\/li>\n
  3. For example, it\u2019s unable to see that the decline of these sites that exclusively \u201ccompare prices\u201d\u00a0is more directly related to the rapid growth of sites such as Amazon or eBay, <\/b>which not only offer consumers the ability to compare prices (products from various merchants, good customer service, fast purchases and deliveries, returns…). There is empirical proof difficult to refute: Google and its price comparisons are already irrelevant in countries where Amazon has a local page.<\/li>\n
  4. It is striking to see that the Commission has not taken into account the mobile factor<\/b> when analyzing the decline of price comparison sites.\u00a0More than 80% of Europe\u2019s digital traffic is generated through a mobile device<\/b>. A large part of the decline comes from the weakness of European price comparison sites, small companies unable to adapt their services to the mobile technology.<\/li>\n
  5. The survival of some of these price comparison sites in Europe, such as Idealo, <\/i>has a lot to do with their initiative to compete with eBay and Amazon<\/b>.\u00a0 In this case,\u00a0Idealo<\/i>\u00a0chose to invest and adapt itself.<\/li>\n
  6. The Commission’s criteria as to the legality of the issues are absolutely confusing and arbitrary. Not satisfied with this, its tries to tell the search engine how to organize its organic results<\/b>. \u00a0There is not even an inkling of having considered the users\u2019 interests who, by the way, should be essential elements in the case.\"google-comison-europea\"<\/a><\/li>\n
  7. For the Commission, direct traffic, or leads or apps in the mobile ecosystem are irrelevant. <\/b>Its analysis is anchored in the \u00abJurassic era\u00bb of the Google search ecosystem.<\/li>\n
  8. And lastly, the Commission gets into the twist of\u00a0setting a price for advertising space <\/b>on a site at the rate of 1 cent of a euro (chosen \u201ca la carte\u201d by aggregators \/ price comparison sites). This, in addition to opening the door to the most absolute arbitrariness,<\/b>\u00a0leads the way within the digital world to ancient practices of economic protectionism discarded in Europe more than 30 years ago<\/b>.<\/li>\n<\/ol>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

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    For whom the bells actually toll<\/b><\/h3>\n

    Perhaps in the most \u00abHemingwayan\u00bb sense, the\u00a0bells toll for the European Commission itself, <\/b>due to its inability to foster a digital ecosystem that may compete with Asia and the United States<\/b>.<\/p>\n

    Following the criteria of safeguarding digital competition, large fines would have to be imposed on the Commission itself for issues such as:<\/p>\n