Should digital monopolies be broken up?
European moves against Google are about protecting companies, not consumers
ALTHOUGH no company is mentioned by name, it is very clear which American internet giant the European Parliament has in mind in a resolution that has been doing the rounds in the run-up to a vote on November 27th. One draft calls for “unbundling search engines from other commercial services” to ensure a level playing field for European companies and consumers. This is the latest and most dramatic outbreak of Googlephobia in Europe.
Europe's former competition commissioner, Joaquín Almunia, brokered a series of settlements this year requiring Google to give more prominence to rivals' shopping and map services alongside its own in search results. But MEPs want his successor, Margrethe Vestager, to take a firmer line. Hence the calls to dismember the company.
The parliament does not actually have the power to carry out this threat. But it touches on a question that has been raised by politicians from Washington to Seoul and brings together all sorts of issues from privacy to industrial policy. How worrying is the dominance of the internet by Google and a handful of other firms?
Who's afraid of the big bad search engine?
Google (whose executive chairman, Eric Schmidt, is a member of the board of The Economist's parent company) has 68% of the market of web searches in America and more than 90% in many European countries. Like Facebook, Amazon and other tech giants, it benefits from the network effects whereby the popularity of a service attracts more users and thus becomes self-perpetuating. It collects more data than any other company and is better at mining those data for insights. Once people start using Google's search (and its e-mail, maps and digital storage), they rarely move on. Small advertisers find switching to another platform too burdensome to bother.
谷歌（其执行董事长埃里克·施密特，是《经济学人》的母公司董事会的成员）具有在美国网络搜索市场的68 ％和在许多欧洲国家90％以上的份额。像脸书 ，亚马逊等科技巨头，它们从网络效应中获利，由此一个服务的普及，吸引更多的用户，从而自我延续。谷歌收集比其他任何公司更多的数据，其探索这些数据的洞察力更好。一旦人们开始使用谷歌的搜索（以及其电子邮件，地图和数字存储），他们很少继续前进搜索。小广告客户找到切换到另一个平台则过于繁琐费心。
Google is clearly dominant, then; but whether it abuses that dominance is another matter. It stands accused of favouring its own services in search results, making it hard for advertisers to manage campaigns across several online platforms, and presenting answers on some search pages directly rather than referring users to other websites. But its behaviour is not in the same class as Microsoft's systematic campaign against the Netscape browser in the late 1990s: there are no e-mails talking about “cutting off” competitors' “air supply”. What's more, some of the features that hurt Google's competitors benefit its consumers. Giving people flight details, dictionary definitions or a map right away saves them time. And while advertisers often pay hefty rates for clicks, users get Google's service for nothing—rather as plumbers and florists fork out to be listed in Yellow Pages which are given to readers gratis, and nightclubs charge men steep entry prices but let women in free.
There are also good reasons why governments should regulate internet monopolies less energetically than offline ones. First, barriers to entry are lower in the digital realm. It has never been easier to launch a new online product or service: consider the rapid rise of Instagram, WhatsApp or Slack. Building a rival infrastructure to a physical incumbent is far more expensive (just ask telecoms operators or energy firms), and as a result there is much less competition (and more need for regulation) in the real world. True, big firms can always buy upstart rivals (as Facebook did with Instagram and WhatsApp, and Google did with Waze, Apture and many more). But such acquisitions then encourage the formation of even more start-ups, creating even more competition for incumbents.
Second, although switching from Google and other online giants is not costless, their products do not lock customers in as Windows, Microsoft's operating system, did. And although network effects may persist for a while, they do not confer a lasting advantage: consider the decline of MySpace, or more recently of Orkut, Google's once-dominant social network in Brazil, both eclipsed by Facebook—itself threatened by a wave of messaging apps.
Finally, the lesson of recent decades is that technology monopolists (think of IBM in mainframes or Microsoft in PC operating systems) may be dominant for a while, but they are eventually toppled when they fail to move with the times, or when new technologies expand the market in unexpected ways, exposing them to new rivals. Facebook is eating into Google's advertising revenue. Despite the success of Android, Google's mobile platform, the rise of smartphones may undermine Google: users now spend more time on apps than on the web, and Google is gradually losing control of Android as other firms build their own mobile ecosystems on top of its open-source underpinnings. So far, no company has remained information technology's top dog from one cycle to the next. Sometimes former monopolies end up with a lucrative franchise in a legacy area, as Microsoft and IBM have. But the kingdoms they rule turn out to be only part of a much larger map.
Looking after their own
The European Parliament's Googlephobia looks a mask for two concerns, one worthier than the other. The lamentable one, which American politicians pointed out this week, is a desire to protect European companies. Among the loudest voices lobbying against Google are Axel Springer and Hubert Burda Media, two German media giants. Instead of attacking successful American companies, Europe's leaders should ask themselves why their continent has not produced a Google or a Facebook. Opening up the EU's digital services market would do more to create one than protecting local incumbents.
The good reason for worrying about the internet giants is privacy. It is right to limit the ability of Google and Facebook to use personal data: their services should, for instance, come with default settings guarding privacy, so companies gathering personal information have to ask consumers to opt in. Europe's politicians have shown more interest in this than American ones. But to address these concerns, they should regulate companies' behaviour, not their market power. Some clearer thinking by European politicians would benefit the continent's citizens.
1. unbundle vt. 对…作分类交易；解除捆绑
2. dismember vt. 肢解，割断手足；分割，瓜分
1）. V-T To dismember the body of a dead person or animal means to cut or pull it into pieces. 肢解
She then dismembered him, hiding parts of his body in the cellar.
2）.V-T To dismember a country or organization means to break it up into smaller parts. 分割疆土
...Hitler's plans to occupy and dismember Czechoslovakia.
ADJ If you describe something as burdensome, you mean it is worrying or hard to deal with. 繁重的
...a burdensome debt.
The load was too burdensome.
1）. N-COUNT An incumbent is someone who holds an official post at a particular time. 在职者
In general, incumbents have a 94 percent chance of being re-elected.
2）.ADJ Incumbent is also an adjective. 在职的
...the only candidate who defeated an incumbent senator.
3）.ADJ If it is incumbent on or upon you to do something, it is your duty or responsibility to do it. 有责任履行的
She felt it was incumbent on herself to act immediately.
ADJ If you describe something as lamentable, you mean that it is very unfortunate or disappointing. 令人扼腕的; 使人惋惜的
This lamentable state of affairs lasted until 1947.
His command of English was lamentable.