Opinion

Has the EU bowled Google a googly?

July 20, 2018

IS the European Commission right to have fined Google a record $5 billion for apparently abusing its dominance of smartphone operating systems to ensure that makers installed only Google’s browser Chrome and its own search engine?

Back in California’s Silicon Valley pundits suspect that this week’s ruling by EU competition supremo Margrethe Vestager is all about sour grapes and Europe’s inability to rival and challenge the worldwide dominance of the US software giants. Google’s parent, Alphabet is challenging the ruling and the demand that within 90 days it changes its business model to allow smartphone makers to preinstall other browsers and search engines.

The American firms argues that there is nothing to stop purchasers of Android phones from downloading and using the browsers and search engines of their choice. But this is a little ingenuous. The Google app store only works efficiently with Chrome. The company’s core Google Suite program is designed to integrate functionality as well as smartphone owners entirely within its operating environment.

And besides, most consumers either lack the savvy or the motivation to download rival programs. Personalization generally goes no further than changing ring tones and desktop pictures. It is one of the extraordinary realities of computers sold in the last 20 years that owners use only a fraction — one study says no more than 20 percent — of the features that are built into them.

Google might also argue that loading a smartphone with all the alternatives by way of browsers, search engines and productivity suites, to say nothing of music streaming, video viewing and image editing programs, would leave a new owner with far too many initial choices when all that was required was a phone that worked straight out the box.

Nevertheless, the EU has a point. All the software giants are trying to channel users into their operating environments. Though their programs cost users no money, they carry a far higher charge in the way in which user data is constantly being harvested and repackaged to advertisers. This is where Silicon Valley makes the bulk of its money.

It is now a common experience for people to check out a potential purchase on the product’s web page, only to find themselves being targeted by ads for the same product on their social media pages. This demonstrates that the reach of the dominant software players extends right inside the private computers of everyone who uses them. And short of home-brewed operating systems based on Linux, which are beyond the patience and understanding of all but serious power-users, this means that whatever environment is chosen, the intrusion into personal and indeed corporate computers is effectively total.

Google also points to the fact that the industry is awash with eager, young upstart challengers, which can grow rapidly to achieve a strong market share. This, it says, was the way it grew itself. Yet this overlooks the way in which until now the US behemoths have used their cash-pile billions to buy up any promising technology companies before they can threaten their dominance.

As the sector matures, challengers will find it increasingly hard to make an impression on the dominant players and their ever-more integrating operating environments. Therefore the EU move to censure Google is probably welcome. But whether it will make much difference in the long-run has to be doubted.


July 20, 2018
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