being global The company has its perks. There is a lot of money to be made abroad. But the biggest US tech companies are discovering that there’s also a downside: Every country you make money in is a country that can try to regulate you.
It’s hard to keep track of all the tech-related antitrust action that’s happening around the world, in part because it doesn’t always seem to be worth paying close attention to. In Europe, which has long been home to the world’s most aggressive regulators, Google alone has been dealt a blow $2.7 billion fine In 2017, a 5 billion dollars fine In 2018, a $1.7 billion fine In 2019. These amounts will be devastating for most companies, but they are nothing more than rounding errors for a company that reported $61.9 billion In the last quarter revenue.
However, foreign countries are increasingly moving beyond fines for slapping on the wrist. Instead, they are forcing tech companies to change the way they do business. In February, Australia pass the law Giving news publishers the right to negotiate payments from the dominant internet platforms — effectively, Facebook and Google. In August, South Korea became first country To pass a law forcing Apple and Google to open their own mobile app stores to switch payment systems, threatening their hold on the 30 percent commission they charge developers. And in the event of potentially huge repercussions, Google will soon have to respond to the Turkish competition authority the demand To stop favoring its own properties in local search results.
The consequences of such cases could extend far beyond the borders of the state enforcing the new law, creating natural experiences that regulators in other countries might emulate. For example, the fact that Google and Facebook have accepted the Australian Media Bargaining Act may accelerate similar efforts in other countries, including TaiwanAnd Canadaeven United State. Luther Lowe, as senior vice president of public policy at Yelp who has spent more than a decade lobbying for antitrust action against Google, refers to the phenomenon, plausibly, as “therapeutic creep.”
In other cases, companies that are forced to change their business model abroad may decide to embrace that shift globally before they are forced to. After settling an investigation by the Japan Fair Trade Commission, Apple decided to do so Implementation of the solution—Allow audio, video, and reading apps to link to their own websites to accept payment — globally.
“Sometimes it is the market that drives it: Companies decide that it is too costly to devise different compliance strategies in different markets,” said Anu Bradford, professor of international and antitrust law at Columbia University. “Or, sometimes, it’s in anticipation of counterfeit regulations: they know it’s there, and they won’t wait for the Russians or the Turks to make their case.”
Although it has not received the same level of media attention as Australia and South Korea, the case in Turkey could become the biggest deal. This is because it gets to the heart of how Google uses its power as a gatekeeper for most of the internet’s traffic.
The case relates to what is called a local search, such as when you search for “restaurants near me” or “hardware store”. This is a huge category of search traffic –almost half Among all the searches on Google, according to some analysts. Google’s critics and competitors have long complained that Google unfairly uses its dominance to direct local search results to its own offerings, even when that isn’t the most useful result. Think about how, if you search on Google for “Chinese restaurant”, the top of the results page will probably have a widget that Google calls OneBox. It will include a Google Maps section and some Google Reviews of Chinese restaurants near you. You will have to scroll down to find the best organic results, which could be from Yelp or TripAdvisor.
This dynamic has infuriated Google’s critics and its competitors for years. One of those affected competitors, Yelp, The case started In Turkey, by submitting a complaint to the state competition authority. Google argues that its local search results are designed to be maximally useful to users, not to colorize their bottom line. But Turkish regulators disputed this, concluding that Google had “violated Article 6 of the Turkish Competition Law by abusing its dominant position in the public search services market to promote local search services and compare accommodation prices in a way that excludes its competitors”. (I quote a translation provided by a Turkish lawyer). in April fine About 36 million dollars. That’s less than what Google earned every two hours, on average, in 2020. But while the fine was trivial, the rest of the decision was not. The authority issued a preliminary ruling ordering Google to come up with a way to display local search results that do not favor themselves over competitors.