Welcome to episode 63 of This Week Online Today, where I will be talking to you about the big online news that has been happening this week today to make sure that you are ahead of the game when it comes to running your online brand successfully.
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In this episode of This Week Online Today, I talk about the following:
- why Google got fined and the case against them by the EU
- Google being accused of abusing its power on the use of Android of smartphone manufacturers
- what the Google CEO has to say about that
- whether Google should be allowed to do what they want with their own products
- the benefits of anti-competition law
- The statement/press release from EU commissioner about the fine on Google
- News report about the Google’s fine by the EU
- Google CEO, Sundar Pichai’s statement about the fine and his appeal
- The previous fine by the EU on the allegation of Google abusing their shopping platform on their search result
- Why I Use DuckDuckGo with examples of how Google had taken advantage of their dominance
Welcome to This Week Online Today podcast with your host, Ahmed Khalifa, where I will be talking about the biggest online news that has happened this week and why you should be aware of it. Don’t forget, if you subscribe to the newsletter, you’ll also receive a bonus tip of the week of what you should do about it. You’ll find that link in the show notes. In the meantime, let’s get straight on to the show.
What’s up, everyone? I am Ahmed Khalifa, and this is episode 63 of This Week Online Today with big news because it involved big, big money. Damn, it’s big money.
Really, what happened is Google had been fined by the European Union $5.1 billion. Let me just convert that. That is 4.34 billion euros or 3.8 billion pounds. This is because they have been kind of accused of being just abusive over their power on Android, and the European Union don’t mess about if you are messing with them.
What it is is that it’s apparently “serious illegal behaviour.” This is for the way that Google has kind of taken advantage of Android to dominate the search engine and how it’s used on mobile as well. The story is that they’re accusing Google of forcing the manufacturers of smartphones to pre-install the Google search and browser app if they want to use Android, the Android operating system.
Any manufacturers that don’t do that and do not listen to Google, they’re not going to be allowed to use the Google Play Store and all these things that come with it, like obviously the apps and stuff that you want to instal as well. Pretty much useless, really, if you can’t instal any apps. If you’re just going to use it for a phone, fine, but if you want to use apps, but you don’t install what Google is allegedly telling you to do, then they’re going to give you it. They’re not going to allow you to do that.
The European Union, they’re not messing about. They were like, you know what, that’s not good enough. They investigated it, and apparently, they’ve been investigating it for I think like two or three years, I’ve read somewhere, and they didn’t like what’s been going on. Big money. $5.1 billion is crazy money.
It’s funny because it’s exactly a year ago, around June 2017, and Google had been fined again by the European Union about, I guess, half of that, around $2.5 billion or whatever. This time it was because they were favouring its own shopping service over other people on the search result.
Again, they were accused of abusing the power of their search engine dominance, obviously. They’ve been accused of abusing that so that they promote their own products, which in this case was the shopping service, over everyone else, even though everyone else has that shopping comparison website and stuff like that. It’s not the first time that Google got slapped on the wrist by the EU, and now it’s happening again.
You might think that that is a big, big number, and really to, I quote, “reflect the seriousness and the sustained nature” of this kind of act, and this was by the antitrust chief called Margrethe Vestager. She’s been kind of in charge of … involved in that kind of investigation. They’ve been forcing Samsung and Huawei and HTC to pre-install, I believe, 11 Google apps on their devices. You can imagine that really already they are dominating the search, greater reach, get more people to use it, more people to click on their ads. That’s what they don’t like.
I remember in the past where you have these pre-installed apps, and they are kind of in the way. I don’t use them, but you can’t uninstall it. I didn’t like that. I actually find it really, really annoying. Why would I want these apps to take up the memory of my phone just because it has to be there by default. I thought it was … I was thinking it’s not fair that people like Samsung and HTC, they are forcing people to do that, but it seems like it’s Google, according to the European Union.
If Google apparently does not start changing that practice within the next 90 days, then they’re going to face a penalty of up to 5% of the average worldwide daily revenue of its parent company, and the parent company is Alphabet. That’s the umbrella, the brand of Google. They’re not going to mess around with that, so it’s interesting to see what Google said about that. Obviously, they have responded.
The CEO of Google, Sundar Pichai, and obviously he got back with it and released a statement talking about Android, how they have created more choice, not less. He has made several argument in the statement. I’m going to put it in the show note. You can read about it as well. He has argued many areas such as, for example, the decision has ignored the fact that Android phones compete with the iOS phone by Apple, so doesn’t even think about that. I don’t know. Maybe they are looking at Apple. Who knows?
Rapid innovation, wide choice, and falling prices are classic hallmarks of robust competition. Android has enabled this and created more choice for everyone, not less. This is why we intend to appeal today’s Android decision https://t.co/TnpMZlDV8j
— Sundar Pichai (@sundarpichai) July 18, 2018
Sundar also says that it misses the whole idea of how much Android provides to thousands of phone makers, and they’ve given them the ability to have lots of apps on their phone, not just the 11 Google apps that they have to pre-install.
Again, Sundar also said that it gives an opportunity to millions of app developers around the world to grow further, and their business is kind of built around Android.
On top of that, Sundar is arguing that it’s given an option of billions of customers out there who can afford and use cutting-edge Android smartphones.
Obviously, they’re going to appeal it. That’s going to happen. I don’t know how that’s going to work. I don’t know how long it’s going to take. It’s going to take a while actually to … It’s not a simple case. They have been investigating for several years, so it’s going to take a while. Anyway, they’re going to appeal with it.
It’s getting messy, and it’s getting political as well, because obviously Trump got involved and is accusing EU of being kind of, I guess, naughty, in a way, and just criticising the EU for slapping a $5 billion fine on one of our great companies, Google. “They have taken advantage of the U.S., but not for long.” That’s politics. Let’s leave that aside. I’m not really going to get involved with that. It just obviously got the attention of the White House as well.
If you might think that it’s a lot of money, it is a lot of money obviously, 5.1 billion. It’s not something that they’re going to just hand over, though, isn’t it? Even though their revenue has grown, still they’re going to fight against it. Apparently, since the European Commission began investigating the whole case on Android around three years ago, the annual revenue for Alphabet has grown from $75 billion to $111 billion.
Obviously, they have grown a crazy amount, and they have gotten more stronger on the mobile phone market, the search engine market, and they have sold around 1.25 billion Android handsets around the world in 2017. Massive. It is huge, huge stuff. It’s not something that is going to be a huge fine if you think about it that way, but it’s still a huge fine if you think in a different angle.
You might argue, as well, isn’t it their choice? Isn’t the whole thing about Google that they get to do what they want to do because it’s their product, obviously within reason. It should have good intention, all that kind of stuff. People are arguing not just about this case, but also last year about the shopping service on their search result. People think, “It’s Google’s product. They can do whatever they like with it,” but there is a lot about anti-competition.
Whether you like it or not, anti-competition law exists in the European Union. I don’t know about the rest of the world, but it exists there. In a way, it’s a good thing, anti-competition law, to prevent anyone from dominating and abusing that.
For me, I believe healthy competition is really, really important. If you think about it, it encourages innovation. Different people, different companies try to be better than the others, so they become more creative and become more innovative. It makes it a better price, really. It makes it easier to afford.
If only one company does this, then they can really make it expensive and make it hard for people to have access with it. If more people are competing against each other, it makes the products more affordable.
It also maintains the standard of the products. Again, if you have that one company kind of just really being complacent, just chilling out because they don’t have to try so hard, well, then where’s the standard in that? If different people are competing against each other, then obviously the standard is kept at the high point.
Of course, choices to consumers. We want choices. You don’t want to focus on one brand, and that’s it, unless you are a fan of it, but then that’s a different story. Choices is a good thing.
I’ve talked about it in a blog post, and it’s something that I will, again, put it in the show note. I was talking about how Google do kind of take advantage of their dominance in the search engine market. In this blog post, I was talking about how I use the search engine called DuckDuckGo. They are folks focused around the privacy area.
Google kind of, in a way, trying to maybe abuse their power. One of the things that they did, actually, is to buy the domain duck.com. That redirects to Google, which is a bit sneaky. I think it’s very, very sneaky, because if people want DuckDuckGo, but they don’t type duckduckgo.com, they for some reason type duck.com, then it goes to Google, and they’re like, “You know what, I’ll just search there.” It’s quite sneaky.
Another way how Google has kind of abused their power is that they were forcing users in the past to use Google+. Do you remember them, Google+? Anyway, they forced users in the past to use Google+ to comment and use YouTube. When that happened, man, there was an outrage. People were not happy about it.
One, because Google+ is just … Nobody cares about it. A small number of people use it. In general, as a society, people don’t use it, don’t enjoy it. They don’t like it. They complained that, why should I have to have Google+ to use YouTube? Again, Google was kind of abusing their power there.
There is some kind of logic on both sides of your argument on Google. They can do whatever they want. It’s their product; they should decide. On the other hand, it’s good for the consumers if there are competition, because there are a lot of reasons behind that, and I’ve already explained that.
Thing is, maybe there’s more to the story. Maybe there is a bit more political angle to it, because right now, as of the time of recording, there is a lot of conflicts around the issue on trade between the U.S. and Europe. Is that getting involved? Who knows? Maybe that’s kind of getting slipped in there in that case, and people are angry about it in the EU and they decided to take advantage of it. Who knows? I’m not going to say it is. We just don’t know, but that’s something that’s going on right now.
Again, at the same time, we all know that the EU, they don’t mess about, and they’re strict when it comes to adopting new rules, even if they’re tough. Just like the whole thing about GDPR, the whole new data protection regulation. Other countries are going to use that as a template as well. This is the thing; the EU has kind of imposed that on everyone, that you must use it, this is the new rule, and if you don’t use it, then you’re going to get fined, kind of thing.
They’re very strict about these things. It’s a warning, as well, to anyone who kind of chooses to go against them, anyone, like tech companies, who choose to do something that, you know what, let’s just go around what the EU says and do it our way. Let’s ignore them; they don’t have any power. Well, they do have power. It’s a tricky one.
If we round it all up, let me just be clear as well. Even though I have my doubts and suspicions about Google, I am a bit suspicious about what they do, and because of the work that I do, I tend to learn a lot about what goes on behind the scenes of Google. Some stuff, I’m like, “Hmm, that’s suspicious.” Again, that happens to any brand around the world, not just Google.
At the same time, it doesn’t mean that I’m not using their product. I’ve got an Android phone. I use sometimes Google Docs. I’m thinking about buying one of their smart speakers so I can learn about voice search, all that kind of stuff.
At the same time, I chose not to use their search engine, and I use DuckDuckGo instead. I don’t want to use their search engine for privacy reasons, but I use it for certain things that I need it for, like when I do my SEO work. I use Google for that, obviously.
Google has benefit to the world. They have benefit to society. I’m getting benefit because I get traffic from people searching on Google and then finding my site. I get to benefit from that. I’m not going to say that they should not be around. No. That’s just crazy talk.
Still, it doesn’t mean that Google can abuse their power. If that’s what they’re guilty of, it’s up to the EU to decide, to work out amongst them and see how it works, and then they can appeal. We’ll see what happens after that. It doesn’t mean that you can abuse your power.
Whoever you are, whatever you’re doing, it’s just not something that you should agree with. We’ll see what happens with that case. It’s a very complicated case. I went on for a bit longer than I thought, but I hope you get an idea of what that case is about.
What do you think? Is it a good thing? Is it a bad thing? Let me know what you think. Send me a tweet or just reach out to me. The link is in the show note. I’m curious to know what you think. In the meantime, thank you for listening, take care, and I’ll see you next week.
Thank you for listening to this episode of This Week Online Today. I really do appreciate it, and I hope you found it useful. If you have enjoyed this show, please do leave a review on iTunes. It would mean the world to me. I really would appreciate that.
Thank you again. You rock! One more thing. I just want to remind you to do your thing, because it matters.
I’ll see you next week.
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