The recent move by the European Commissioner for Competition against Google was, quite frankly, stunning from my viewpoint.
The objections the EU centered around the Google shopping system seemed rather trumped-up and struck me as an attempt by Europe to punish success. Google is not alone in being targeted by regulators for what amounts to a state-sponsored shake down. If found to have violated antitrust rules, Google could be fined 10% of its profits or $6.6 billion.
The Economist recently reported that across the U.S. and much of the Western world, the practice of extorting the funds necessary to keep the public sector doors open and lights on is increasingly coming from fines and settlements made by large private companies who unknowingly violated one or two minor rules out of the thousands they must follow on daily biases.
It’s small wonder that the Libertarian philosophy has begun to not only take root but also thrive throughout the tech industry. I do not subscribe to the Libertarian philosophy, which in a nutshell is the essence of Thomas Jefferson’s old saying “The Government which governs best, governs least.”
However, I can understand the technology industry’s fascination with such a philosophy, especially in light of the challenges it faces. Tech companies like Google are pushing the bounds of human innovation every day and opening up new frontiers through the power of the Internet.
These young, innovative entrepreneurs who care not for the debates of the last century – such as who can marry whom, or whether housing is a human right – instead strive to connect all people everywhere to the great social marketplace of the Internet, build self-driving cars, and make a super computer that will fit in a pocket.
These creators, as they see themselves, are often held back by septuagenarian lawmakers who barely understand how to work their voice mail. While that characterization of our leaders may be a bit of an exaggeration, the average age in congress is 57, and some are quite happily boast they have never sent an e-mail.
Why should the brightest of our time be subject to rules and regulations that were written in a different time? To be fair, many of the antitrust practices began in the early 20th century with a healthy dose of government intervention into the economy.
That time in history was dominated by industries such as rail, coal, steel and manufacturing with giants, which through their monopolistic control of their industry caused economic stagnation of their sector, and were abusive toward their workers. The coal field wars and the image of 8-year-olds chained to massive machines is not something Americans are fond of remembering, but they happened nonetheless.
In order to enhance competition and to a greater extent provided the labor force with a modicum of protection, the antitrust laws were written and have been used in measured doses since.
Of course, as is the case with all man-made institutions, antitrust laws are subject to abuse and hijack by those who wield them, which is what I believe is happening in Europe.
Google may control 90% of Europe’s search market, but that’s because it’s good at what it does. Moreover, it’s not gobbling up any competing search engines and Internet services that arise, while keeping its 50,000 employees chained to their desks working 12-hour shifts.
On the contrary, Google has actually been good for market growth as entrepreneurs can promote their apps through its Android OS systems or sell through its online marketplaces.
This media outlets use Google search metrics to reach more readers, which helps connect more people to information and grow the collective mass of human knowledge.
Google employees and its corporate practices are often cited and widely imitated by other industries as forward thinking. Google employees, after all, enjoy generous salaries and perks as well as an extremely informal and comfortable work environment. All of this seems very in line with Google’s now disused motto “Don’t Be Evil.”
Sadly, Europe and elements in the U.S. have always attributed success of one firm, group or individual to the failure of others. If Google is successful it must have done something wrong seems to be the thinking.
Europe’s antitrust czar Margrethe Vestager, who is spearheading the crusade against Google, manages to quite brilliantly fit the caricature of an obstructionist bureaucrat. I do not doubt she is a well-educated woman acting in what she sees as the accordance of her duties.
However, she is also a career civil servant and politician with no business experience, who belongs to a left-wing Danish political party. If viewed through the wrong lens, her pursuit of Google is just another in a long line of left-wing populist stunts meant to cater to Europe’s increasingly alienated voters.
Europe’s hostility toward big business could be seen as the death throes of its socialist movement increasingly attempting to uphold the vanishing welfare state. Yet hostility toward success in a global market breeds economic stagnation. The EU youth unemployment is 16.3%, is approaching 53% in Spain and is at 11.4% in Vestager’s native Denmark.
The U.S., in comparison, is at about 12%. Even so, while the unemployed American youth often has no more than a GED, there are European young men and women with doctorates working at coffee shops. The global economy and the increased connectivity of the digital age means that governments need to rethink their rules governing not just competitiveness, but also the free flow of labor and goods.
After all, without even trying, companies like Google have helped mankind achieve a near universal free-flow of ideas. States and companies need to wake up to these new realities. After all, the state can play an important and often helpful role in the economy if properly utilized.
The aversion to a complete financial collapse in 2008 was testament to that as has been the subsidization by governments to expand wireless and Internet connectivity, just as they subsidized the expansion of telegraph and railroads in the last century. Working in concert, government and private enterprise can build great things. Working at odds, it will be the common people who suffer.
