From counter culture paradise to capitalist dystopia

By Richard Copland.

Can you complete the following series? Avant, Firefox, Flock, GreenBrowser, K-Meleon, Maxthon, Opera, Safari, Sleipnir, Slim. A couple of pointers, think back to 2009, they were the browsers accessible via BrowserChoice.eu

This thought piece will pick up on some of the points raised in the Californication and Radical Technologies article that we could well be living through a period where the digital stars are losing their shine in the eyes of some.  It will explore how governments and regulators in Europe are using an antitrust case to introduce controls to rebalance innovation and stimulate consumer choice and will make the case that where there is regulation there is opportunity to innovate.

The answer to the challenge was Google’s Chrome and Microsoft’s Internet Explorer (IE). BrowserChoice.eu was part of the resolution to the European Commission investigation into the bundling of Internet Explorer with Windows operating systems from Microsoft.  The prevailing line was that “Microsoft’s tying of Internet Explorer to the Windows operating system harms competition between web browsers, undermines product innovation and ultimately reduces consumer choice”. In 2009, IE had 65% market share with Chrome at just over 1%.  Roll forward seven years to the end of 2016 and according to Statcounter, the respective market share numbers were Chrome 60% and IE just over 10%.  How the tide turned for Google the cooler option at the time, one couldn’t really consider them a start-up as they were over 11 years old, to effectively owning the browser and becoming one of the most valuable and powerful companies in the world.

What comes around goes around

As noted in my first piece Californication and Radical Technologies, last month the European Commission imposed a £2.1 billion pound antitrust fine on Google, marking the first time a big antitrust regulator has sanctioned the company’s operations.  Anxiety over the US’s digital starlets is rising to new levels. From Facebook to Apple, and Uber to Netflix, the platforms are encroaching into an ever-wider spread of work and personal life with the knock-on implications for these commercial activities to be monitored and regulated.

The European Commission’s seven year investigation concluded that the search group had abused its near monopoly in online search to “give illegal advantage” to its own shopping service which “denied other companies the chance to compete” and left consumers without “genuine choice”.

Back in December 2009, when Google had just over 1% of the browser market share, Adam Raff published a column in the New York times entitled Search, but you may not find.  “Google’s treatment of Foundem stifled our growth,” he wrote. “We may be heading toward a bleakly uniform world of Google everything – Google Travel, Google Finance, Google Insurance, Google Real Estate, Google Telecoms and, of course Google Books.” It is also worth noting that the biggest winner out of another separate case from 2004 of Microsoft vs Commission on competition policy for search engines was Google. If in 2009, Google was seen to be the elephant in the room in terms of search, imagine the benefits that they have accrued from taking over the gateway to cyberspace with their growth in browser usage over the last seven years.

Levelling the playing field again

In Margrethe Vestager’s, judgement the facts show technology firms are abusing their power. As the current EC competition commissioner that is a significant position to take.  She has been reported as saying “Technology is, in many respects, an enabler for an open, transparent society”.  This very much in keeping with the initial founders of the technology counter culture.  “But it is also an enabler for supervision to a completely unforeseen degree. And for commercialising personal space to an unforeseen degree.”

In recent interviews Vestager, also cites the example of another of California’s digital starlets in Facebook offering up the instance of how users content is licenced. “A user can allow Facebook to use any content, pictures or video? And that it can sublicense them to others. If and when the user terminates their account, they get the licence back, on the basis you haven’t shared it and those with whom you have shared it still have it” The very basis of why you might use Facebook you might argue, in this case Facebook can keep sublicensing your content.

“Dominant companies can’t abuse their position to create advantage in related markets” Vestager stated in 2015.  This very much echoed the 2009 ruling that product innovation and consumer choices will be limited. What is the best form of market structure for innovation to flourish is an interesting question which can be discussed in a future piece and I would welcome thoughts, comments and feedback from readers to contribute to the debate. What is considered too dominant in markets that operate at the far faster rate of digital innovation and how do we apply a framework when we’re forced to accommodate some degree of change in the way we do things every time the newest version of a device, operating system or application is released?

Google has been seen to abuse its dominance in internet search, using its 90 per cent market share to send traffic to its own shopping service at the expense of rivals. Vestager also used her judgement to declare a principle that a dominant position in one market can’t be abused to create advantage in related markets. This can be applied beyond the narrow realm of the search case.  Going forward, Google will have to give equal treatment to other services in its search results, rather than promoting its own.  To judge by the response of many of the companies that have been lining up against Google, she has drawn an important distinction.

Bravely pushing new boundaries

For the European and national, regulators that have for a long time challenged the US internet companies on issues from privacy to copyright, a potential victory in an antitrust case represents a new front in trying to limit some of the most powerful groups on the planet. However, rather than opening new space for innovative competitors, Vestager’s verdicts may have the unintended consequence of only creating opportunities for Google’s equally threatening rivals; Amazon, its chief competitor in shopping, that could well benefit.

The belief is that success in this case shows there is nothing different about taking on the digital monopolists, with some observers taking the view that they have the tools and mechanisms in place to enforce fair play. But I’m not so sure. How effective a weapon antitrust will turn out to be against the big tech groups is open to question. Applying the principle laid down in the Google case to other markets will take laborious investigation and prosecution. As demonstrated by the last seven years, it takes a massive amount of time and effort to bring a successful case.  As called out earlier the speed of change in the digital economy is phenomenal. A generation in internet tech is now only two years.

How many of the browsers from the original 12 are still operating? In visiting the sites for each it’s clear that whilst the domain may still be registered and operating, innovation has long gone from most of them and only 4 make up 99% market share. But all is not lost, a new innovative entrant in this space that is bucking the trend and going head to head with mainstream is Brave.  Very much worth checking out as offering next generation functionality in a very challenging space.  Brave by name and nature.

Innovation within the speed limits

In the digital economy, data is the new oil. Combined with the European Privacy Shield and the forthcoming General Data Protection Regulation, which guards EU citizens data, even when its collected by firms outside Europe. Vestager’s moves could look like an attempt to pin down US tech firms at source. For some it’s the start of a new antitrust regime. To others its naked protectionism. For me, it’s the opportunity for new entrants and innovations to come to the fore. The winners will be the agile and forward thinking entities that design and develop their offerings in flexible and responsive ways that take advantage of the core values at the heart of the proposed changes. It’s possible to make the comparison to the world of Formula One and how each year they are able to take and work within the regulations to create a some of fastest and most innovative cars in the world.

This topic came up at a recent Clustre event exploring innovation at Speed. Sir Patrick Head – Co-Founder, Williams F1 opened up his keynote with a revealing comment on the environment for innovation within F1 “Curiously – and contrary to most people’s expectations – innovation in F1 is strictly limited by restrictive regulation. Consequently, change comes in the form of continuous, rapid, iterative development. Although this environment is highly conducive to innovation, the opportunities for truly game-changing ideas are strictly limited. So, perhaps surprisingly, the most creative people in F1 often focus their innovative talents on spin-off applications outside of motorsport.”

This behaviour and isn’t solely confined to the high octane competitive world of F1. A shift is occurring with the rise of mission driven founders proving that purpose and values can be synonymous with profit. The rising stars of Silicon Valley are turning down or leaving high paying jobs for positions that pay less and are far more uncertain. They are making their moves because they want a shot at changing the world and work that was worthy of their lives. I will unpack this whole transition back to some of original counter culture or independent progressive liberal thinking in the last part of this series. Are we seeing a resurgence of social and commercial innovation with the millennials around the world driven on by the Californian freedom?  That is for next time. If the above has been insightful please don’t hesitate to sign up to receive the alert for the last part in the series.

2017-08-10T10:07:25+00:00 August 10th, 2017|The Innovation-COOLER|