With its Statement of Objections against Google on Android, the European Commission is rightly exercising its role as guardian of fair competition. Now it’s time for Member states to put in place a coordinated effort at EU level on the taxation of big tech companies.
“The European Union has the duty to ensure freedom of competition”, only by doing this we can “ensure the innovation that is necessary to the growth of our economy”.
These words from EU Commissioner for Competition Margrethe Vestager lay out a basic principle that the Union has a responsibility to protect.
Fair competition and consumer protection translate into lower prices and greater choice for all EU citizens. In addition, they provide the basis for the creation of a single digital market in which European entrepreneurship can prosper.
To give just two examples: the cost of phone calls in Europe has been reduced considerably compared to ten years ago; and families and business are now able to freely choose their electricity and gas supplier.
On April 20, the EU published a Statement of Objections against Google in which it claimed that its “Internet search”, mobile operating system (Android) and app store management practices were contrary to European competition law.
Commissioner Vestager accused the US giant of promoting its products at the expense of its competitors, forcing smartphone producers willing to install the Android operating system to also install Google’s apps.
This despite the US company’s claim that “Android is an open-source operating system based on open innovation”.
In the past, the Union has been a strong guardian of fair competition, as in the two cases involving Microsoft (condemned for the lack of free choice related to its web browser and abuse of dominant position) and Intel (sanctioned in 2014 due to its market monopoly in a model of popular processors).
Given Google’s dominant position, it will be necessary to identify structural remedies, as happened in the past with telecom companies, Microsoft, and other players in similar conditions. We enjoy the results of these remedies every day, with these markets now fully competitive.
The EU must ensure pluralism in the market so that it can establish a fair level of competition. Only if the rules are the same for everyone will it be possible to give birth to large technology companies.
The new technologies field is particularly complex and delicate: its huge opportunities must be accompanied by major investments in research and technology.
Google covers approximately 90% of the smartphone operating system’s market thanks to Android.
Consequently, it can also dominate the app and online search markets (the two are crucial for advertising sales) as well as the market for videos thanks to Youtube.
This massive presence means the Mountain View-based company holds the largest share of the online advertising market.
Thinking about the incredible numbers that all this produces, we must also address the issue of the relation between large hi-tech companies and European tax agencies.
We are awaiting a European tax regulation: in the meantime, individual States are moving in a random order.
Google will pay the British treasury a £130 million bill in back taxes, a value that many analysts consider to be too low bearing in mind the amount owed since 2005. France has chosen a different path, seeking as much as €1.6 billion from Google in unpaid taxes.
What about Italy? Amidst disputes between tax authorities and the judiciary, as well as agreements rejected by the company, the government’s position remains unclear.
Picture credits: David Macchi
Alessandra Poggiani, the director general of the Agency for Digital Italy (Agid), tells The Digital Post how the government is working towards the objectives of the Digital Agenda for Europe. “Embracing the digital economy is not only a question of growth and new opportunities for Italy. It is also a question of democracy”, says Ms Poggiani.
phot credits: Giuseppe Moscato
The digitalization of key travel services has the potential to be a great boost for the Italian economy. Almost 60% of reservations in Italy are already made directly online. Tourism is already the major online industry in Italy registering revenues of almost €5 billion per year.
The digitization of the economy has revolutionized the tourism market, radically changing its existing business models. Tourists have become promoters and entrepreneurs have become ambassadors through websites, social media, blogs and other online platforms.
Over time the relationship between market operators, such as tourism entrepreneurs and travel agencies, and institutions such as tourism promotion agencies has changed. To be competitive policymakers need to identify and focus on their country’s key competitive advantages and differentiate the traveler’s experience from other similar destinations.
Digitalization is a great tool for doing exactly this. As we face a more and more volatile macroeconomic environment, developing destinations should consider effective short-term turnaround digital strategies to strengthen their travel and tourism sectors and reestablish their appeal to the international traveler.
We expect tourism to remain a significant driver of future economic growth even if economic, political, and environmental challenges are growing. Policy makers who focus on their country’s most prominent assets and are able to leverage them most effectively, will be best positioned to turn volatility risks into opportunities for long-term stability.
This is why we aim to completely overhaul the Italian tourism promotion agency to equip it for the digital age.
It is important to establish strong relations with key tourism markets. For instance, our Italian tourism strategy is highly focused on the Chinese market. As a consequence Mr. Dario Franceschini, the Italian Minister of Cultural Heritage and Tourism, recently announced that China and Italy have signed a series of cooperation agreements.
A stronger tourism and cultural partnership between the two countries will make Chinese tourists a great driving force for the development of the Italian market over the next ten years. Likewise, India, Russia, USA and other developed and developing countries are and will be solid partners and thriving markets.
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It has changed tourist’s habits, and business models. This has been most acutely felt in the areas of promotion and communication. Today, a strategy for digital tourism is mandatory if we are to successfully promote Italy’s main assets, namely life style, culture, food industry, design, and even upmarket goods.
In Italy, tourism accounts for almost 40% of ecommerce. The Italian Government therefore understands the importance of digitalizing tourism. This is why a recent government decree established a 30% tax credit for digital innovation expenditures incurred by firms.
Digital platforms will be used to create a “tourism system” focused on developing integrated ICT services shared by several operators, such as tourist cards, territorial websites, and integrated itineraries. Some provinces and locations are already establishing good practices in these areas that can be spread nationwide.
There is little doubt of Italy’s appeal as a tourist destination. The Country Brand Index 2012-2013, ranks us first for artistic and cultural heritage, history, food and wine. This appeal combined with a digital revolution will be a decisive economic boost for our economy.