High stakes
The stakes are high. Google appears to believe its ability to grow is under threat if it is prevented from using its dominance of general web search as a springboard into new markets and technologies. Philosophically and practically, the EU’s decision is an early but significant step towards labelling the company’s main product a natural monopoly that may require long-term regulation.
Think of National Grid or BT’s Openreach telecoms network. For the most part there is only one way to reach consumers with electricity or broadband, so their operations are tightly controlled by law, with separation from retail services to protect competition.
Search next?
Could Google search one day face similar restrictions? Perhaps online advertising sales could be separated from the monopoly search provider, for instance. It is a distant threat and such drastic action would require evidence of monopoly abuse on a grand scale, but it is the sort of thing Google’s army of lawyers and lobbyists worry about long term.
While search is a vastly profitable monopoly, its relevance has declined in the smartphone era, in which consumers spend vast amounts of time on social networks and go straight to apps to transact. The valuable “intent to buy” searches Google was tinkering with when it attracted the European Commission’s ire are increasingly carried out on Amazon. Google wants, though does not yet need, to prove it can innovate to maintain its role at the centre of online life.
It could therefore hold its hands up, pay its fine, make the necessary changes to its products and then examine how it ended up here, to avoid a repeat. It is already facing further EU investigations of the contracts it uses to tie partners to its mobile software Android and its advertising network.
Or maybe Google is still feeling lucky. Either way, it still truly needs to find its own 'blockchain' moment ... fast!
