What the EC does not Understand About Google and Innovation

European Commission has fined Google north of 2 billion Euros, allegedly for not allowing fair competition of web-based price comparison services. The ruling is based on a false assumption that Google is in the Web page search business. It is not.

Flashback
In the mid 1990s I have written a search engine for finding free software on FTP archives. The service was quite popular and it was doing something that search engines of the time — Yahoo and Altavista — were not doing. Today I search for software using Google. Sometimes it points me to the site that grew out of my search engine — CNET.com — sometimes it does not. There is nothing legal procedures can do about it — Google became better at finding shareware. Specialized search engines are not worth the trouble. It is called progress.

Google is an information service

Figure 1

Yes, some of us remember Google as a better AltaVista. This was a long time ago. As the Internet is less and less about Web pages, Google is less and less about finding web pages. Google is repositioning itself as information assistant, providing its users information that they need.

Indeed, fifteen years ago this was mostly about finding a web page that could provide a user with whatever information she wants. Using Google search one would learn where is the information required, one would then click through to that website and read the information itself on that webpage.

Figure 2

This is how things worked in the days of Yahoo and AltaVista. But since then Google innovated and increasingly started providing not the link to where is information but the information itself.

Figure 3

The examples are numerous (see Figures 1–4). You can ask Google how much is 600 dollars in euros and it will display the result, not route you to a site of the bank that does the conversion; you can ask it for a translation of the word “tablet” into Spanish and it will translate, not route you to a site that does translation. You can ask it for a definition of a word and it will display the definition; ask it how to travel to that beach resort and will give you instructions via google maps or flight ticket merchants.

Figure 4.

This is valuable for the customer. If Google would not be doing it, someone else would. In fact, there are services like Amazon Alexa or Apple Siri that answer such questions and speak them out to you. This trend will continue because the internet is not a series of Web pages to be “found” by a search engine but a repository of information and knowledge that people need.

When I shop for, say a tablet, it is convenient that Google displays where and at what price I can get it. It compiles the prices from various stores it is indexing for web searching anyway and presents me with a link to those stores. The store gets the traffic, I get a good price, it is convenient. Figure 5 is in principle no different than Figures 1–4.

Figure 5

Google takes different approaches as to where to get information to display from. Definitions, for example, come from Wikipedia and various dictionaries. Wikipedia gets a link at the top of the page and is probably interested in allowing Google to do so. But I can’t imagine a court fining Google for displaying a definition of Wikipedia and not of Encyclopedia Britannica. It is their free choice.

Below the information itself — about word definitions, travel options, stock prices etc. on Figures 1–5 — Google is still displaying links to related websites. If Google was deliberately putting competing price comparison sites lower, not displaying their ads at the top etc. this would indeed be wrongdoing to be prosecuted and fined. But it should be proven that Google was indeed tweaking its page rank algorithm to the disadvantage of some particular Websites. This does not seem to be the case.

Conclusion

Information searching has evolved from web page search to information delivery. Google is providing information to its users and increasingly this information are not links to Web pages but information itself.

If Websites do not want Google to have their information, they can prevent that with the robots.txt convention. Last time I checked Google honors that. And Google should be limited to fair use of information from other Webpages and not display so much gathered information that it would reduce the traffic of the Websites where the information was from.

If the EC wants to limit Google to displaying links to Web pages it should say so. In that case, the essence would be limiting innovation in information delivery services and not limiting monopolies. There was a period towards the end of the dark ages that the courts tried to limit innovation and in the 19th century when the Luddites tried the same. It did not work for long.


Longer version originally published at New Europe.