Old world vs new economy

There is more than a touch of the old world versus the new in the battle between the European Union and a quintessentially American company, Google, one of the runaway leaders of the new economy. Having been fined the equivalent of a record $2.7 billion for the abuse of its market leader position in terms of tweaking online shopping promotions, it remains to be seen how the search engine Google reacts to a market across the Atlantic attempting to make a level playing field. The company’s reported misbehaviour is to do with highlighting its own online shopping service above that of rivals, but then which market leader would not be guilty of such practices to preserve their position. However, Google’s propensity to project its ads on page one and push rivals down to page four does seem to be stretching to the point of killing the opposition.

This is not the first occasion on which an American technology giant is running into headwinds in Europe, where Apple too is facing a huge tax demand from Ireland. It may be an interesting thought and yet it would be too simplistic to believe the business ecosystem in Europe is highly regulated while the one “across the pond” is a kind of unregulated jungle where the fittest survive. However, if Google is forced to make changes to the way it bundles services and promotes its digital advertising on mobile phones and devices in order to stay in Europe and do business in fair competition, it would only serve to make it a more ethical multinational. It is also moot whether bureaucratic tweaking of the marketplace will lead to the ideal of an equitable marketplace from which consumers will benefit. The world is still on a learning curve when it comes to the digital economy and so long as EU’s action is only market regulation and not a witch hunt, there could be a valuable lesson to be learnt.