Google denies claims that it stifles competition in ‘highly innovative’ digital space
It powers our internet searches, maps out our car journeys, owns our web browsers, and operates our email. Nowadays, Google, the company whose name was inspired by the almost infinite number googol (10100) seems to have as many products and services on offer as its namesake does zeroes.
Often labelled the gatekeeper of the internet, Google’s domination over all things online has caused competitors and regulators alike to develop a severe case of tall poppy syndrome.
While the US search giant prefers to paint itself as an innovative leader in technology, dedicated to organising the world’s information for the benefit of users, others fear Google has taken on such a prominent position of power that it can, and is, abusing it for its own benefit.
The European Union (EU) has had Google in its sights for some time and recently filed an antitrust agreement against the company for deliberately favouring its own comparative shopping product in general search results.
The EU’s new competition commissioner, Margrethe Vestager, issued a formal statement accusing Google of breaking the law by favouring its own shopping product and misusing its smartphone operating system, Android.
While Google will have the opportunity to dispute the charges, senior vice president, Amit Singhal, has fired back an early response to allegations that the company is misusing its power by detailing what he sees as the strong levels of competition and innovation in the digital marketplace.
“While Google may be the most used search engine, people can now find and access information in numerous different ways – and allegations of harm, for consumers and competitors, have proved to be wide of the mark,” Singhal said.
It’s a widely known fact that Google is the most popular search engine in the world, being used for 88 percent of all searches worldwide, according to Statista, and an even higher share (closer to 98 per cent) in Australia and New Zealand.
While Singhal didn’t go into specifics, he said that there were other prominent search engines and social platforms out there that people use besides Google. He noted that seven out of every eight minutes users spend on a mobile device is spent on apps, not searching Google, he pointed out.
To combat allegations that Google has reached such a high position that it is discouraging all forms of competition, Singhal noted that in 2010, when Google acquired the flight search provider ITA to launch Google Flight Search, competitors Expedia and Travelocity claimed the acquisition would have a major impact on their profits. Five years later, Expedia, Orbitz, Priceline and Travelocity account for 95 percent of the US online travel market.
“Any economist would say that you typically do not see a tonne of innovation, new entrants or investment in sectors where competition is stagnating — or dominated by one player. Yet that is exactly what’s happening in our world,” he said.
While many other companies have expressed similar fears, Singhal also listed other detractors that continue to see their profits and market shares grow.
In the past four years, Yelp has grown its revenue 350 per cent, Tripadvisor’s revenue has nearly doubled, Expedia has grown its revenue 67 per cent (and is investing a lot of its own resources in Google Hotel Finder).
Singhal also touched on the online shopping market Google has been accused of tampering with. Within the last few years, major online shopping sites such as Amazon and eBay have experienced major growth in traffic, especially in the UK, France and Germany.
Posted by Dylan Brown