Europe against Google: but there are no European Googles

Google & the EU. Agenda-WEF. Credits: REUTERS/Dado Ruvic. Blog Elcano
Google & the EU. Agenda-WEF. Credits: REUTERS/Dado Ruvic. Blog Elcano
(Google & the EU. Agenda-WEF. Credits: REUTERS/Dado Ruvic)

The European Commission has accused Google, through a Statement of Objections, of distorting competition and benefiting its own sales by manipulating its browser. It has also opened a file to determine whether Android –the open operating system for mobiles promoted by the US giant– has abused its dominant position. However, the Commission has made no attempt against the dominant position of the search engine itself, although it is moving in that direction while seeking a strategy for a single digital market, according to a draft revealed by the Financial Times.

Regardless of its justification, the Commission’s step against Google may have come too late, as occurred with its accusations against Microsoft for abusing the position of its browser, Explorer, since the technology evolved faster than European legal procedures despite the €561 million fine imposed in 2013 on the company founded by Bill Gates for not complying with its commitments to the EU executive.

Europeans not only lack a European Google (or an Amazon or an Alibaba, against which the Commission is also acting, prompted by France and Germany) but, according to a report, are using this search engine to a greater extent (up to 90%, or even 97% in certain cases, such as Finland and Germany) than Americans surfers themselves (between 45% and 67%). But the issue is not to build a European search engine –there have been unsuccessful attempts on more than one occasion– but to wonder why there is no such company as Google, Amazon, Apple or Facebook in the EU. That is the question posed by Marina Mazzucato, author of The Entrepreneurial State, in a recent article. The answer lies is not so much the alleged greater appetite for risk among American entrepreneurs, or the very existence of a cluster such as Silicon Valley, but in the boost provided by the public sector, the State, in the US.

As Mazzucato comments in her book, the technologies that led to the iPhone (the first smart phone, created in 2007) were funded and promoted by the US Government: Internet (despite being a European invention), GPS, touchscreens and, more recently, Siri voice-recognition, among others. Behind these developments were the US Air Force, NASA, the CIA, DARPA (Defense Advanced Research Projects Agency) and the National Science Foundation, which in turn financed the algorithm that led to Google. Not to talk about nanotechnology and other sectors.

Neither the US State, nor the Pentagon in particular, are standing idle. Their fear now is that in the field of technological innovation, and partly thanks to themselves, the private sector will get ahead and they are keen not to let that happen. Significantly, in mid-April the Secretary of Defence, Ash Carter, visited Silicon Valley to meet technologists, investors and entrepreneurs, including those from Facebook, to discuss the issue and devise a new technology strategy. The Pentagon took advantage of the occasion to launch a new cyberstrategy which calls for ‘building bridges with the private sector and beyond’ to ‘discover and validate new ideas for cybersecurity for the Department of Defense, and the country as a whole’. The strategy, which has been analysed by Enrique Fojón, is not a mere statement of intent since it is backed up by a US$12 billion (€11 billion) budget.

One of the goals of Spain’s 2013 Cybersecurity Strategy is similar: ‘to promote and maintain R&D in cybersecurity effectively. This will require proper coordination of all agents involved in ICT, facilitating collaboration between companies and public research organizations…’. But the results have so far been limited, with an annual business turnover of around €120 million –according to Fojón– when the market has a total worldwide value of around €140,000 million.

Other countries, which have been successful in this field, have chosen different methods, such as Japan and South Korea. The latter has excelled with its Korea Institute of Industrial Technology (KITECH). The EU and its Member States probably need to generate a new industrial policy, without fearing failure, as in innovation the latter is in many cases inevitable. To avoid socialising risks and failures, not successes, Mazzucato argues for a new deal between States and companies by which ‘public investments are negotiated in return for the reinvestment of corporate profits back into innovation’. Going beyond Mazzucato’s proposal, such a deal would also need to have a European dimension, despite there being no defence policy or a European Pentagon or, indeed, no other institutions in the EU similar to those mentioned above.

But make no mistake: beyond Bill Gates and Steve Jobs, if there is no Google or Apple in Europe it is because the EU and its Member States have failed to back up the idea.