NEWSLETTER #75, July 2, 2017
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GOOBOOK DUOPOLY FACING HEADWINDS
This was a week in which the winds seemed to change.
Governments outside the U.S. are starting to determine that practices that have been acceptable here in the States are illegal under their regulations.
"Google suffered a major blow on Tuesday after European antitrust officials fined the search giant a record $2.7 billion for unfairly favoring some of its own services over those of rivals." said The New York Times.
$2.7 billion is chump change to Google. But the threat of continuous regulatory scrutiny is a very big deal.
Additionally, Facebook, YouTube (owned by Google) and other social media companies are being recognized for what they are: media companies. Facebook and Google have steadfastly maintained that since they do not create the "content" that appears on their websites, they are not media companies and are not subject to the usual regulatory responsibilities of media companies. This is clearly a horseshit argument and has been recognized as such by the German government who are threatening hefty fines if they don't abide by the hate speech laws of Germany.
While speech freedom is a very sensitive issue about which I favor the broadest interpretations, if Facebook and Google want to be exempt from any country's legal requirements they better come up with a better story than "we are not media companies."
Meanwhile, other U.S. tech companies are also facing increasing scrutiny from foreign governments. Here is a chart from The Wall Street Journal that sums up current problem areas for U.S. tech companies.
As noted in the chart, Amazon is facing tax problems in Europe. Outside of Europe
the government of South Korea is examining how to deal with the power of Google and Facebook.
While the tech industry had a very powerful friend in Barack Obama, the Trump administration may turn out to be not quite so accepting.
According to The Wall Street Journal...
..."President Donald Trump’s nominee to be the Justice Department’s antitrust chief, Makan Delrahim, has promised to “investigate and vigorously enforce the antitrust laws with respect to online platforms.”
I would hate to be a lawyer for Google or Facebook and have to explain to regulators how a duopoly that garnered 99% of all new online advertising revenue in the U.S. in the 3rd quarter of 2016 does not raise antitrust questions.
Very Artificial Intelligence
In last week's newsletter I wrote unflatteringly about "Marcel" the AI platform that Publicis announced at Cannes.
On Monday night I published a post on my blog questioning Publicis' ability to use Marcel as stated in light of the need for client confidentiality and the threat of hackers.
Sure enough, first thing Tuesday morning WPP was hit by a massive hack attack that immobilized the world's largest agency holding company for a good part of the week.
I hereby avow that I did not mastermind this attack to try to make myself look intelligent. Although I can use all the help I can get...
Beer Here
Week after next I will be in Montreal speaking to a group of marketing executives from the beer industry. My speaking schedule for the fall is shaping up to be fun with talks planned in Australia, Amsterdam, Nice, and Prague. And, who knows, maybe even a few here in the States.
Ten Years Of... I Don't Know... Something
This week I am celebrating the 10th anniversary of my blog, The Ad Contrarian. When I started it I didn't think it would last 10 days. The fact that I have been able to drag the damn thing out this long is due to one thing only... the remarkable and unremitting silliness of the advertising industry.
Independence Day
To everyone here in the U.S., have a happy July 4th.
To all my friends over in the U.K.... boy, did you dodge a bullet.
