September 30, 2014
This open letter is a guest contribution by Bruno Guillard, founder and CEO of 1PLUSV.
Dear Ms Vestager,
The death penalty was abolished in Europe decades ago – for human beings only. In the corporate world, it continues. In the Internet corporate world, it accelerates.
My company, a French technology start up,1plusV, is just one of many firms Google decided to put to death rather than face competition. The day of our execution was 22 September 2007. We had developed an exciting new hybrid technology for searches which proved highly popular. Then suddenly Google dropped the pages of our star website from its index, without warning, without appeal. The site lost 90 per cent of its traffic overnight. We crawled away and died.
I decided not to accept the right of Google to kill my firm. I had read about people in Brussels brave enough to take on corporate titans such as Microsoft and Intel.
The outgoing EU Competition Commissioner Joaquim Almunia did not seem too keen to tackle Google. Against the advice of many of his people to send formal charges he chose to seek a settlement, as if he stood a chance to strike a balanced deal with some of the world’s smartest techies supported by some of the world’s cleverest lawyers.
Faced with Commission inaction the Googlopoly just got bigger. This is not about politics but about absolute market dominance and the elimination of competition.
There is no way disputing the fact that in its early days Google did very useful, at times absolutely remarkable things. There is no doubt either that the company has kept its thirst for innovation. But things turned in anti-competitive direction in 2007, when Google introduced the so-called “universal search”, a nice name for a ugly move. What Google really did was starting to mix up natural results from the algorithmic search and promoting its own products exclusively.
The end point is clear: failing proper action by antitrust authorities, every search that one way or the other can generate money will fairly soon drive the Internet user towards Google related products. What can be done?
Sending formal charges would be a good start. Your predecessor, Mr. Almunia is said to have had a draft in his drawer for two years. That’s a very long time in the Internet age, so maybe the draft needs some refreshing. However for a company that has dozens of billions of cash in the bank even a record fine would be a flea bite.
There are two better options if Europe is serious about bringing Google’s search abuses to an end:
- The Commission should insist Google return to its pre-2007 situation: natural search on the left side of the screen, ads on the right. Search would again be on the merits. Square and honest, although not easy to monitor;
- Or in the spirit of US trust busters the EU should look at breaking up Google, with only search infrastructure and traditional advertising services on one side, and all the rest on the other. That’s what the US authorities did themselves with Standard Oil in 1911 and AT&T in 1982. Economists now agree this benefited the US economy as competition allowed more firms to enter the market. Google will protest that the split would be impossible to engineer, but Yahoo!, which uses Microsoft/Bing search infrastructure, is there to show it is perfectly doable.
The Commission needs also to deal with Google Android, the operating system for 70% of the world’s smartphones, which it has just started to do. Please do pay attention to the subtle, perverse interactions with the search engine.
Dear Ms. Vestager, you inherit a difficult case in a difficult context. Plenty of people will advise caution. Yet the situation in the field is dreadful – just look at the number of complaints the Commission receives about the Googlopoly. The investigation has gone on for four and a half years now so your officials know everything they need to know.
Jean-Claude Juncker has set as a target for his Commission the creation of a true digital economy in Europe. This will not happen unless the Googlopoly allows EU competition to thrive, instead of stifling new start-ups.
You would do Europe and the world a tremendous favour and encourage every young European entrepeneur to dream of setting up a business, and hiring people instead of rolling over and allowing Google to dominate and control the market.
Bruno GuillardLaurens Cerulus