Google’s antitrust fine: facing platform fear
For most companies, the prospect of a £3.8bn fine would be an existential threat. For Google, it’s perhaps the cost of doing business, and at just a few percent of its cash reserves, an affordable one at that.
Google is being pursued by European authorities for throwing its weight around, applying the leverage of its dominance in smartphones to shore up its position of strength in search and browsers. Three numbers assert the scale of this dominance: Google takes over 90% of search queries, provides the platform for 80% of smartphones, and has 60% of the browser market.
It is a principle of our moderated markets that if one company becomes too dominant in one area, then applies that dominance to squash competition in adjacent areas, authorities will intervene on the consumer’s behalf, on the grounds that consumers lose out when competition is impossible.
This provides some hope for the direct competitors Google faces, in Europe at least. Their prospects of getting their own browser or search engine onto people’s Android devices may be improved. But such regulations have done little to settle the nerves of companies perhaps less directly related to the current EU campaigns.
I haven’t yet engaged a corporate client in a discussion about strategy without the global tech platforms — Google, Facebook, Amazon particularly, Apple and Microsoft to a lesser extent— being number one on the agenda, or thereabouts. Some are concerned about direct competition, in retail, media, or digital services. Some are worried about the power these companies command over the channels between them and their customers. All want to know what the the platforms are going to do next.
I can’t tell them of course, though I might point in certain directions. But I can tell them how to prepare for whatever it might be. The prescription always follows similar lines.
— First, pay closer attention to the future. Many of my clients run infrequent but serious looks at the 30 year horizon. All run detailed planning for the next twelve months. In between, things get a little fuzzy. I advocate a six-monthly foresight process focused on the next 2–5 years following a formal process designed to break people out of their blinkered view of the world.
— Second, get closer to your customers. People have higher-than-ever expectations of their suppliers and you need to be more responsive to direct and indirect signals. Increase your listening capability and either accelerate the flow of information to decision-makers, or even better, push that decision-making power as far to the edge of the organisation as you dare.
— Third, experiment more. Experimentation is cheaper now than it ever has been, and it’s easier to test and validate prototypes with good data. Test the things customers tell you they want, but crucially test the things they don’t yet know that they want. Do it consistently.
— Fourth, prepare the organisation for radical change. This has many components: structural, cultural, operational. It’s about transparency and comprehension: how well do you know how your organisation *really* works, and would you know how to change it when the time comes? It’s about attitude: do your people fear change because it threatens their role and their comfort? Are they prepared to learn? And it’s about process: How does information flow through your organisation and how much friction and risk is involved in that flow?
Ultimately, every company, and every leader, has to face their fear of the platforms. They can choose to do it today, or they can wait for the threat to become real.