How Google Can Rebuild Trust in EMEA
The European Union is pushing back on American-based technological expansion. What can Google do to encourage the region to be more receptive?
EMEA asks tech for some space
In June of 2017, the European Union slapped a record-breaking fine of €2.42bn on Google for violating anti-trust law and promoting its own price comparison service, leading critics to accuse the EU of bias against US firms [1]. This was one of multiple fines foisted upon tech companies by the EU within the past decade, which previously included a €13bn fine on Apple, a €1.2bn fine on Microsoft, and a €1.1bn fine on Intel for various antitrust and collusion allegations.
While high tech’s influence and impact on other industries have been growing significantly in recent decades, creating value and optimizing the lives of millions, it has also experienced increasing resistance and withdrawal from certain populations as a result of growing isolationist tensions. As noted in the Wall Street Journal, “globalization is now showing signs of retreat”, and this phenomenon is experienced especially prominently by tech in EMEA [2].
Isolationist political movements on international trade policies should be of massive concern (and already are) to Google. This growing mistrust of high tech and Google in particular will cause forced product changes to avoid additional fines, launches of less effective versions of new digital products within EMEA, and as a result will massively reduce the supply and flow of customer search data that is core to Google’s profitability.
What Google is doing now
To address this growing concern, Google’s management made massive changes to their product in Europe, launched a brand-love-building marketing campaign, and continued to remove content requested through their “right to be forgotten” process [3]. After taking a few steps forward, Google has taken a few steps back in an attempt to regain the trust it has lost within the region.
In the medium term, Google is focusing efforts on cooperating with new European regulation going into effect in the future. In particular, the company is working to support the new General Data Protection Regulation (GDPR), whose primary objective lies in in “unifying data protection rules across Europe, strengthening the rights of EU citizens and placing new obligations on all organisations that offer goods and services online” [4]. This is an effort to present a joint front with European governmental bodies and mollify EU citizen fears about consumer control over their data and security. The goal is to continue providing the world’s information in an organized way while driving personalized search and ad results using data minded from consumers – but only as much as each person is willing to provide. It has yet to be seen how effective this will be, as European culture has traditionally been more resistant to the large-scale data scraping that Americans have come to be more tolerant of in exchange for free services. Google is heavily dependent on this continuous data flow from consumers, so their primary goal in Europe must be for users to continue to use their services. This can only be achieved through regaining trust.
Google has also dedicated resources to encourage digital literacy in Europe [5]. This is an effort to fill the digital skills gap and to increase the population’s understanding of technology. An additional benefit to this program will benefit Google in that it will also build brand trust.
Source: YouTube
What’s next
Other steps I recommend Google’s management takes on to address this concern in the short and medium term are to:
- Focus efforts on gaining trust in England in particular
After Brexit, England is in the process of exiting the European Union and continues to be one of the highest revenue-driving countries in the region. Google should tread this transition properly and continue to be a partner to both England and the EU. - Deep-dive into the European tech mindset is when it comes to technology
The EU mindset, when it comes to technology, is clearly starkly different from that of the American mindset, and even more so from the Asian mindset. Only through understanding what makes this particular segment tick will Google be able to create and message the right products to this incredibly important community.
Open questions
After conducting this research around the isolationist megatrend’s impact on high tech, two open questions arise:
- What are the considerations Google should be taking into account when messaging new, highly value-add products that require marginal consumer data to increase efficacy?
- What are other actions Google should take or messages they should share to help users feel safe using their products while not inundating them with unnecessary information?
[747 words]
1Boffey, Daniel, ”Google appeals against EU’s €2.4bn fine over search engine results,” The Guardian. September 11, 2017, [https://www.theguardian.com/technology/2017/sep/11/google-appeals-eu-fine-search-engine-results-shopping-service], accessed November 2017.
2 Warsh, Kevin; Davis, Scott. “The Retreat of Globalization”, The Wall Street Journal Asia; Hong Kong. 16 Oct 2012.
3Scott, Mark. “Europe Tried to Rein In Google. It Backfired.” New York Times. April 18th, 2016, [https://www.nytimes.com/2016/04/19/technology/google-europe-privacy-watchdog.html], accessed November 2017.
4Malcolm, William. “Getting ready for Europe’s new data protection rules”. The Keyword. August 8, 2017, [https://www.blog.google/topics/google-europe/gdpr-europe-data-protection-rules/], accessed November 2017.
5Brittin, Matt. “Funding 75,000 Udacity scholarships to bridge the digital skills gap”. The Keyword. September 5, 2017, [https://www.blog.google/topics/google-europe/funding-udacity-scholarships-digital-skills/], accessed November 2017.
Google is not the first technology company to face pushback against its practices or dominance in Europe. While the trend of isolationism is no doubt growing, companies like Microsoft faced antitrust lawsuits in Europe that caused them to change business practices. Google should look to the experiences of such companies in designing their response to EU allegations. They should also consider how they can deepen offices/relationships within the EU to make it more difficult for the EU to push them out altogether.
One additional question for organizations like Google and other large technology firms is how they respond to the threat posed by international interference in European elections, especially attempts that seem to favor isolationist candidates such as Le Pen. Will the EU as these firms to take a more proactive role in protecting the information they store and the news they disseminate? If so, how should Google prepare for such eventualities even as it tries to get in good standing with the EU?
One likely reason that Google faces significant mistrust and pushback in Europe (and the UK especially) is that it doesn’t pay much tax. Google has frequently been in the news in the UK for its nominal tax bill paid on £6bn revenues (a significant share of sales are booked to Ireland, which has a lower tax rate). Paying more taxes may make governments more receptive to Google, but my guess is that it is not a strategy Google is considering. So putting that aside, the key challenge for Google is to give consumers more control over their data usage, or at least give them the semblance of control. More transparency over how data is used is a key enabler for this. Without knowing more about what data is used, when, and why, consumers in the EU will have a hard time swallowing Google telling them that it knows best. Initiatives around digital literacy are positive, but in my mind a somewhat indirect approach that doesn’t address the crux of the issue.
Thanks for your essay! I think it is very good observation on EU part and it might interesting as well try to understand Google actions for “MEA” from “EMEA” – Middle East and Africa or even Eastern Europe from wider EEMEA.
For Middle Asia increasing tension with USA can easily lead for sanctions against American based tech companies and transliteration search engines are already become more popular in region mostly because of “domestic feeling of trust”.
Similar situation has already happened in Eastern Europe where Russia, Belarus and some other countries strongly support Yandex (“Russian Google”). Results of this support are the law on collecting VAT from foreign e-companies (http://tass.com/economy/923601) and the law to store all data of Russian citizens within Russian borders what caused the block of LinkedIn and some messengers (http://www.bbc.com/news/technology-38014501). Of course, the reason for that was also driven by political side (for example mentioned by @Katharine).
I think that good tactics for Google might be cooperation with local players (like Uber case in different countries) – nowadays this is the region you cannot speak not from the power side but can be very efficient on cooperation side. I agree that current initiatives are good as first steps but further “localisation” can provide greater opportunities for Google and other Tech companies.
The European Union may feel that Google is benefitting too much from Europe’s resources and is pushing back not because they are American but because they aren’t providing the value the European Union would like. Google is an American company listed on the American stock exchanges but they employ the resources of the European Union’s high tech and sales workers. Their complex subsidiary structure allows them to avoid paying large taxes so the EU is not benefitting from either the profits or the taxes Google may otherwise return if they were based in the EU. Google could appease the EU by investing in building the education pipeline and startup ecosystem that would allow the EU to benefit from future Google’s of their own.
I think the answer to both of your questions comes down to increased transparency. As you mentioned, Google cannot approach the EU with the an American mindset, because the geographies are fundamentally different when it comes to both consumer sentiment and government regulations on internet privacy. One prominent example is the use of browser cookies, which are pieces of data stored locally on a user’s computer or phone that tracks the user’s preferences and actions over time. The EU basically requires websites to ask users to consent to the use of cookies (http://ec.europa.eu/ipg/basics/legal/cookies/index_en.htm), while no such regulation exists in the U.S. Typically, websites in the EU will ask for such consent through a minimally-intrusive banner at the top or bottom of the webpage. Even if it doesn’t change consumer behavior (i.e. the majority of users may click “yes”), it at least gives consumers the option to say “no.” Many companies nowadays ask for consumer data without explaining why consumers would be better off because of it. Google needs to make its value proposition clear to end-users in order to build trust, e.g., “by collecting real-time data on from your Google Maps application, we can make better recommendations for your commute over time, helping you avoid the headaches of traffic.” This gives consumers a better chance to understand the “customer promise” of the service and decide for themselves whether they feel comfortable providing their data to the service.
This significant fine from the European Union should push Google to reconsider the company’s customer promise core operating principles. Namely, what is the role of transparent information and how should it be presented to Google users? How do these principles play out across all of Google’s products and platforms? As Google expands into new businesses it is imperative the company translate its data and transparency principles into a clear and concise message to communicate to its users. As Google looks to regain trust in EU markets, it should take time to understand customer frustrations across different markets and tailor its approaches accordingly. To rebuild trust, Google can consider transparency marketing campaigns, a compelling story in its annual reports focusing on its reactions to the fine, and find ways to support local competition and search engine innovation in the European Union.
Thanks for choosing such an exciting topic! In such issues, its difficult to pinpoint the reason and clarify the intent. As I read about this, from European Union’s point of view, American based tech companies are exploiting their lack of physical offices in a country to book their profits in low-tax states. (https://www.theguardian.com/business/2017/sep/26/eus-tax-plans-for-tech-companies-will-damage-growth-us-body-warns). In nutshell, broader question is that are American based tech companies helping Europe grow enough as compared to the value they are extracting? Tech industry in Europe is quite behind that in US. So though governments are interested in anyone serving their consumers but also have vision to promote in-house capability in any field. One way Indian government deals with this is that it required the companies to put up offices and hire Indian talent so the deal benefits mutually.
On the other hand, to bust consumer side barriers, Google and other companies need to understand the local behaviours, challenges and needs while designing & offering a product. Assuming that a product designed for US consumer will work globally may not help. Eg: Uber offers “pay in cash” option in India.