Mountain View, CA. Don’t be evil has been Google’s motto since the first days of the 2000s and you can definitely feel it in the air when visiting the Company’s HQ in Mountain View, California. On top of the world famous driverless cars and other incredible space age amenities, the (once) most relevant offices of Google, offers its employees and visitors an astonishing sense of peace and serendipity: Google-logo-colored bikes available to everyone, inflating boats ready in case of storm (!) and a beach-volley field are just some the features that contribute to create the feeling to be in a peaceful and happy place.
Yet, outside this Truman-show-like small citadel, especially on the European side of the Atlantic, Google is under great attack by the many categories of stakeholders affected by the omnipresence of this giant of the digital industry from publishers to content owners, to regulators and many national tax agents. It is worthy to underline that Google has a much bigger market share here in Europe (around 90%) compared to what has in the US (67%). On top of that, the NSA scandal hit hard US over-the-top operators as Google or Facebook, blamed to be the longa manus of the Obama Administration when it comes to sharing data and information in violation of European citizen privacy on the altar of US homeland security. As a matter of fact, after the scandal concerning the wiretapping by the NSA that did not spare European leaders’ conversation, things are getting tougher for Big G.
A Germany-led Europe seems to be intended to give a geopolitical spin to what is (and started as) a mere business issue between the disruptor and those being disrupted. It is then no surprise that pushed by the German publishers, Commissioner Oettinger rushed to attack Google as one of the very first statements after his appointment as Commissioner for Digital Agenda back in November.
Privacy, security, market abuse and competition, copyright and tax compliance have so far been some of the main issues that different opponents have raised to attack and try weaken Google: so nothing new under the sun? Not really, because all those themes are now being proficiently (whilst rather confusingly) mixed and merged in one big chorus of blame against Google that – for the majority – goes under the name of Google tax.
Just like pretty much everything in Europe, even the Google Tax has already many different meanings and practical implementations across Member States. It may refer to the need to stop the (maybe unethical, yet surely licit) fiscal agility by Google, to the long-awaited solution to any copyright problems in the publishing world.
France Government has been the first to deal with publishers’ requests and on February, 1 2013, President Hollande has signed an agreement with Google to create a 60 million fund to sustain projects that would have favored the transition to the digital world of the big national publishing industry. Publishers would have also used Google tools and BigG is also part of the board of the Fund. Results of this have been very poor so far. Publishers accept what Confucius would have called the fish (cash, in this case) instead of learning how to fish monetizing users and visits on their website or getting any copyright law. German and Spanish publishers have pursued this way and obtained opt-out and opt-in regime, concerning their presence on Google News service. In both cases, it has just been a matter of time, before publishers could see the drop in visit to websites and decided to drop/ignore the legislation.
The failure of all these three solutions forces publishers to either find new biz solutions or concentrate on other legal/lobbying paths, as they seem to be doing, especially on Competition issues in a strange coalition with tourism industry operators who started the complaints against Google, yet now being themselves under investigation for similar issues.
In a recent visit to the Silicon Valley, it has been made clear to me that threats (and opportunities) are not coming just from Mountain View, but also from Zuckemberg’s HQ in Menlo Park. A quite common chart that is often displayed when tackling this kind of issues, makes evident that publishers should worry more to find a way to keep users on their websites and get money out of it, rather than finding solutions in a Court or through a paragraph of law in one of the 28 States of the Union. Every minute European publishers have around 100 thousand business opportunity created by the click sent to their website through Google (not counting here similar ones originated by Facebook and all other search engines).
The music industry is the clear example that innovation can’t be fought but it can be embraced to create sustainable business models (Spotify rules on this) able to turn into positive the trend of the market. Publishers do well in asking sort of level playing field on several issues (i.e fiscal) but should also focus more on embracing innovation and get in contact with any innovative startup/idea/whatsoever may help them get out of the mud their sector has been for too long now. Snapchat has proved to be ready to jump in this market with new products, Facebook has Paper. Vox and Business Insider are great examples: business opportunities are there to be grabbed.
On the other hand, EU and national regulators should do whatever it takes, to defend a perimeter of competition able to facilitate the birth to new innovative business models and drop this EU-US fight, in the middle of the TTIP negotiations.
* The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of the author’s employer or Clients.