The EU just fined Google $2.77bn. Just don’t expect search and e-commerce to change much any time so
The record fine of €2.42bn imposed on Google by the EU shouldn’t come as surprise to anyone. With dominance for the digital world reaching a crucial ‘Game of Thrones’ style finale, Facebook, Amazon, Google and Apple are playing a high stakes game that is disrupting our received wisdom concerning the web, search, social media and commerce.
Put simply, these companies are trying to circumvent the ‘open’ web with their own business platforms. Facebook has its walled garden content model, imposing ever greater pressure on publishers, Google’s search algorithms are marvellously opaque while Amazon’s marketplace is a self-sustaining, self-perpetuating e-commerce environment that recently acquired Whole Foods in an earthquake acquisition of $13.7bn.
Douglas Rushkoff puts it succinctly in his recent Fast Company article: It’s time to break up Amazon: “In a digital economy, the platform is the business. Netflix content sells its platform. Apple’s devices sell its supposed “ecosystem.” Amazon’s book business, like Uber’s cab business, was just an easy foothold—the low-hanging fruit of an existing but inefficient marketplace—through which to establish a platform monopoly. From that beachhead, the company then pivots to other verticals.”
A world turned upside down
And what of Google today? It has responded with the ‘what’s best for the consumer defence’ packaging search results “in a way that makes it easier for consumers to find what they want”. Disingenuous that may be, but it’s another example of how traditional ideas of free-market capitalism are being upended by digital business models.
More importantly, traditional legislation from employee’s rights to cross-border trading is struggling to catch up. The EU investigation started seven years ago, roughly the same time that the iPad was launched. Looking forward the same distance, where does that leave us in 2024? If legislators are only now catching up with e-commerce and search, how are they going to manage AI and automation, technologies that will make the web look like a hiccup in the history of the industrialised world?
One thing is certain, none of these fines will deflect Google and others on their mission to dominate our lives. The EU’s fine, €2.42bn ($2.72bn) is less than half a percent of Google’s current market cap ($677bn). It’s unlikely that this will much change the direction of search and e-commerce any time soon.