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Wednesday, 28 June 2017

Google's ik

It is more than a quarter of a century since I first heard a colleague - Tony Tudor - say "I Googled it" in explanation of how the had ascertained some obscure fact very quickly. I don't remember the data in question, but I do remember exactly where I was at the time. With a quarter of a century behind me as a researcher in the history of political economy and the economy as such I recognised that I was living in a period of revolutionary change. Then, as now, there were several 'search engines' available and the demise of traditional reference libraries was confidently being predicted; but this was the first time that it was obvious to me that Google was way ahead in the market. That dominance has increased; and yesterday the European Commission struck a blow against it.

The particular issue on which the Commission's ruling was made, was whether or not Google so used its mastery of the system and the data within it that its preferred items were presented to inquirers first, when they wished to make a selection between products and services. The Commission decided that such manipulation took place, fined the firm more than two billion euros, and ordered it to mend its ways. Google 'respectfully' disagreed with that ruling.

A bigger issue, that has been the basis for much Eurobabble over many years, is the dominance of US-based 'technology' firms over the entire universe of computing software and devices that connect customers with the data or the experience that they want. A majority of the few Americans who bother themselves with this issue take the view that it is sour grapes: that the tired old continent of Europe still refuses to recognise that the US has been dominant in global technology since the first quarter of the twentieth century. The EU Commission has tried to use competition law to limit the extent to which European consumers simply use the easiest-to-access and best-known. It is simply a fact that the US giants - Google, Facebook etc - had become predominant before any Europeans had presented alternatives. 

One of my biggest gripes with formal Economics is its under-valuation [almost to the point of ignoring] the centrality of intellectual property - which I characterise as ik - in the contemporary world. The ownership and control of ik - patents, copyright,brand names, trademarks, a person's image and reputation, et cetera - is the principal source of wealth, and the biggest differentiator between individuals. The firms, most notably those in so-called Silicone Valley in California, have gained their prominent position by the novelty and innovation in their products and the skill with which they are then promoted globally. Although it is accessed through computers, smartphones etc, the ik has no physical impedimenta. The distributors of the service and the controllers of the content do not need to deliver any physical product to their global customers: they just put it out there, and claim their tribute for doing so. The European Commission, in all its pomp and glory, can do nothing about that.

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