June 13, 2018
Guest blog post by Patrick Gibbels, owner of Gibbels Public Affairs
This morning, I read a report stating that the German competition authority might be going after platforms, giving European Commissioner Margrethe Vestager (Competition) a new fuel injection for her own crusade.
For the past year, maybe longer, the EU has been happily engaged in platform bashing. There has been outrage amongst European about fee structures, search results, and unfair commercial practices. The narrative: big bad corporations are bullying the small honest entrepreneurs and we need to protect them.
Can we take a step back and look at what we are barking at? Paid search results appear on top, and whoever wins the bid, gets the top ad. “Outrageous”. How can a starting entrepreneur with no resources ever appear on top of the search results?”. Really, people? What was the situation before search engines? Could that starting entrepreneur with no resources take out full-page ads in the Financial Times? Could they produce shiny television commercials and have them broadcasted during prime-time TV? Could they afford radio commercials or even roadside billboards?
The answer is NO. So why do we get so furious when that same starting entrepreneur does not appear in the top search results? Can someone explain the difference please?
People are outraged at the idea of paying large players a percentage of their profit margins to be able to sell on their platforms. “It’s too expensive, it’s not fair”. Really? Can we please try to remember that these companies poured millions upon millions into R&D, figuring out the best ways to operate across Europe and even globally? Can we please also take a moment to answer the following questions: Do you have an amazingly well-functioning online e-commerce structure, with incredible distribution channels, expensive dispute resolution systems, insurances for virtually everything, and a ready-made global client base?
In the 99.9999% likelihood that the answer to these questions is NO, can we ask a few more?: Would you like to spend all of your time figuring this stuff out by yourself? Would you like to spend years generating the resources to do so, or getting investors to buy in to you? Would you like to take risk upon risk upon risk, hiring tens to hundreds of people to take care of legal, distribution, insurance, business development, language barriers, dispute resolution? If the answer to this question is NO, maybe it is time to realize that it is because of the large platforms that your company can make use of all these amazing opportunities, without having to invest a single cent, other than a fee off the profit margin.
Equally, we hear complaints left and right about platforms in the hospitality industry. Small hotels and B&Bs don’t like paying the hotel platforms for their services. Sure, nobody likes to pay. But did people know your 6 bedroom chalet in the middle of the woods in the south of Italy existed? No? They do now, don’t they? Are you fully booked most of the time now? Yes? Did you have to invest heavily in business development and advertising? No?
What are we really complaining about?
Are there things that can be better? Absolutely. Customer service on most platforms sucks. Platforms, you know who you are, be better. Should hybrid platforms be very careful about abusing their own platform and do a better job at keeping things separated? Yep. Be better.
But can we please stop whining? We are turning European SMEs into the ‘millennials’ of the business world: entitled, overprotected, delusional and not ready for the real market place. You are not a unique snow flake that can achieve anything it wants. And if you are one of the 0.0001 percent that actually is, you will!
We need to spend far more time helping European companies innovate and propel themselves to the next level. Create better legislation, stop regulating every type of real innovation to a screeching halt and let the market run itself wherever it can. Make Europe into the most hospitable environments for startups and small businesses and help them flourish and reach their full potential.
Stop horsewhipping the ones that did.Guest contributor