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Google: Antitrust Pressures

Ben Legg
Former COO of Google, Europe

Learning outcomes

  • Potential anti-competitive behavior from Google in the advertising technology business
  • The power of data and how regulation could impact the competitive advantage for Google
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Executive Bio

Ben Legg

Former COO of Google, Europe

Ben is an engineer by training and spent over 10 years in the Royal Engineers in the British Army career before moving to McKinsey. In 2002, he moved to Coca-Cola where he ran teams across Eastern Europe before turning around the Indian business leading 12,000 salespeople. Ben then moved to Google where was COO of UK and Ireland for 2 years before being promoted to COO Europe where he was responsible for writing the monetisation blueprint of Google’s various properties. This involved defining the role of ad units, properties, interactions with agencies and partners, and devising how auctions should work. Ben then ran a Yellow Pages turnaround before running an ad-tech business for 6 years which ran $200m of ad spend through the major technology platforms. Ben is the author of Marketing for CEO’s and is on the Board of The Oxford Foundry where he is a mentor and investor to multiple startups. Read more

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Interview Transcript

What about Google and antitrust?

I’m not saying this because I’m ex-Google, but if you remember back to when they launched, part of their phrase was, “Don’t be evil.” I think they still genuinely believe in that phrase and never deliberately do anything evil. There are other companies, arguably, probably Facebook included, who are more sharp-elbowed, let’s say. That said, Google, often through its naivety or scale, has done bad things by accident. For example, in the early days, they crawled TripAdvisor, and then when people did searches on Google to find out about hotels, they would use TripAdvisor comments and make it look like Google results, which kind of reduced the traffic on TripAdvisor even though it was TripAdvisor that had generated the content.

That was accidentally anti-competitive, and there have probably been twenty or thirty examples of that where Google has been accidentally anti-competitive. I would say they try to do the right thing, but often, accidentally don’t. Will they be broken up? I would argue you could still be broken up even if you don’t deliberately break the law, just because you get too big.

I guess the question is, where is the line? Google would argue everyone has a choice. There are other search engines out there. And these days, not everything happens on search. Some things happen in the app store; there’s a lot of vertical search sites. It’s not just Google versus Bing, Yahoo, or whatever. You can search for a restaurant on Yelp. You can do a search for car insurance on MoneySupermarket, you can search for a hotel on Booking.com, so you don’t have to use Google to find stuff. That is true. It’s not like Google’s trying to lock people in; it’s just such a good product that we all use it. How do you break that up? It’s pretty hard. Maybe you could spin out YouTube like Facebook could spin out Instagram. That’s the kind of thing regulators might look at. Spin YouTube out of Google, spin Instagram out of Facebook. It would be a way of giving advertisers and consumers more choice, leaving less power with Google and Facebook because a lot of that power sits with the data they have on the consumer. Another way might be to say to Google and Facebook, “You need to share appropriate levels of data with other players in the industry so your power differential goes away.”

Another is to say the data belongs to the consumer and Google and Facebook need to pay the consumer to utilise that data. Much harder to implement but probably the most democratic of all the solutions. I don’t know which way it’s going to go. If I were to guess, I don’t think the companies will be broken up, and I don’t think consumers will get paid for the use of their data, but I do think there will be a lot more regulation about what Google and Facebook and others can or can’t do, and also, where they pay their taxes, which is another one now. A lot of European countries are saying they’re going to create a sales tax. They say, “You never declare profits in our country even though you make a fortune; we’ll charge you X% of revenue instead.”

One way or another, regulators are waking up to the fact they need to make sure these companies pay their fair share in tax, don’t abuse the law, probably screen future acquisitions way more closely than they did in the past, and always keep an eye on things like data, privacy, and fake news and work out whether they need to do something more drastic to force players to get their act together.

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