The way the telecoms industry is represented in Europe is still too weak and fragmented, says Proximus CEO Dominique Leroy in a conversation with The Digital Post on the sidelines of the iMinds annual conference. Her main suggestion for the revision of the telecom framework: more regulatory focus on services than technology.
The Digital Post: Let’s start from Internet of Things. Proximus is the first operator in Belgium, and one of the first in Europe, that launched a network for Internet of Things. What is it about?
Dominique Leroy: Historically, telecoms were always about connecting people. More and more in the future, they will also play a key role in connecting things. Against this background, what we did is not so much building a simple network, but setting up a whole end-to-end ecosystem to enable the Internet of Things. We are providing enterprises, consumers as well as developers an end-to-end system equipped with sensors and based on LoRa networks, a long-range and low-power type of networks that connects sensors without SIM cards.
The purpose is to get small packets of data from the sensors through the LoRa networks and store them in our data centers on a platform called MyThings, where we already provide data analytics. The idea is then to open the platform to developers so that they can develop new applications. There are certain domains where we would like to go all the way up to creating applications, mainly in the mobility field, where we think that we can really bring an added value through Internet of Things.
So as you see, the Internet of Things opens up a whole new ecosystem. It is more than a utility provided by telcos. We want to offer solutions, partnerships, we are opening up to other players and therefore we are creating innovation. We are also one of the first companies in the sector moving in this direction.
DL: That’s probably where telco operators have a real added value considering their knowhow: We already provide end-to-end security over our infrastructures, from your phone to the applications you use, all the way to our datacentres. This expertise is very important for tomorrow’s connectivity in cars, home automation and health. LoRa networks come already with a triple encryption key. They secure the sensor identification, the payload and the network. In general, when it comes to using certification, identification and authorization technologies I believe that is where we provide a lot of added value.
TDP: How do you see telecoms operators capitalizing on the Internet of Things in, say, five years from now?
DL: Data consumption today is driven mainly by millions of people connecting with each other. Data consumption will increase dramatically in the coming years as billions of connected devices go on-line. This new reality will create huge volumes of data traffic. IoT will thus become an important piece of the telcos ecosystems, leading to more investment in infrastructures, stimulating more innovation, value, and opportunities for new revenue streams and profit.
TDP: The European commission is working on new proposals to implement greater coordination at European level of radio-spectrum policies. Unfortunately, in the past similar legislative moves were met with strong scepticism from member states. Why this time should be different?
DL: I don’t think member states want to give to Europe their powers on spectrum policy. But they very much understand that if they want to develop a coherent European digital market, there needs to be some coordination. The repurposing of 700 MHz for Wireless Broadband Services should be done within a certain timeframe all over Europe, otherwise it wouldn’t work. If tomorrow we need much higher frequency bandwidth, for instance to be able to develop 5G and self-driving cars, some sort of European coordination is essential to get there.
Moreover, a more consistent policy all over Europe should be applied to the length of licenses. These actions are all feasible, and I think member states will in a way or another agree that’s the right path. However, what they won’t allow is that the EU decide on the prices for the spectrum. In any case, I think that we have an opportunity to have more coordination in terms of timing of the auctions and duration of spectrum licenses.
TDP: What should be the main priorities of the forthcoming proposal on the revision of the EU telecoms framework?
DL: We definitely need less regulation to be able to catch up with more competitive markets. In the last 20 years, Europe has been very effective in overseeing the liberalization of the industry securing a high level of competition. However, today if you look at the big players in the industry, either they come from America, or more and more from Asia. Regulation is certainly one of the root causes of not having strong European digital players.
So, let’s make sure that we deregulate as much as possible, and let competition drive investments and spur innovation. Levelling the playing field is also another important aspect. It is not acceptable anymore that telcos are subjected to obligations on, say, privacy, data usage, or interoperability that are not applying to players operating the same services. The problem today is that regulation is focusing too much on technology and not on services, which produce lot of inconsistencies between cable, telecom, OTT operators providing the same services. So my recipe could be summarized in three elements: less regulation, more level playing field, more regulatory focus on services than technology.
TDP: A word on the increasingly tough stance of Margrethe Vestager on Mergers & Acquisitions?
DL: I think we as an industry need to articulate better what we want, what are the risks of preventing telcos from growing in scale, and what is acceptable and what not. We are not very well-structured and every too often we shy away from speaking with one voice. That also explains why it is easier for regulators to take their own direction: we do not make enough efforts to be listened. We can blame regulators or politicians but I think we should also look at ourselves and see how we can be more united to defend our industry. The way we are represented in Europe is still too weak and fragmented.
Picture credits: Matt Brajlih
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
Until EU Competition Commissioner Margrethe Vestager got very serious about Google antitrust enforcement this past year, previously negligent antitrust enforcement authorities facilitated a dominant Google search and search advertising business
Wake up world, you’ve been disintermediated.
Google now essentially stands between you and most everyone and everything on the Internet.
Google’s dominant search engine + its dominant Android operating system (OS) + its world-leading Chrome web browser + its uniquely-comprehensive, Internet utility functionality of 193 products, services and tools = a virtual Google “Inner-net” regime.
Google’s Inner-net has practically assimilated most all of what the public open-source WorldWideWeb does for Internet users and much, much, more.
And it also has practically insinuated Google-controlled code into a virtual intermediary position between most everyone and most everything on the Internet.
Think of the WorldWideWeb increasingly as the public and open façade of the Web, and Google’s Inner-net as Google’s private, and more closed regime of mostly-dominant, Google-controlled operating systems, platforms, apps, protocols, and APIs that collectively govern how most of the Web operates, largely out of public view.
This makes Google your de facto global governing gatekeeper technically for most all things Internet, if you are an Internet platform, network, business, competitor, advertiser, service provider, manufacturer, content provider, app developer, stakeholder, group, or user.
In other words, one now must go through Google-controlled code somehow to virtually access most all competitive Internet information, apps, devices, software, APIs, networks, the cloud, the Internet of things, etc. — going forward.
And the Google gatekeeper’s gazillion gates tend to remain open and free for only as long as it takes for Google to become dominant in the new targeted area, and then Google tends to close those supposed ‘open’ gates with default settings that favor Google. Google’s default dominance rule-of-thumb is that ~90% of users automatically acquiesce to new Google default settings.
What an epic failure of antitrust enforcement this is.
The FTC obviously facilitated Google’s dominance in approving its acquisitions of DoubleClick and AdMob, and in suspiciously shuttering its Google search bias and Android tying investigations shortly after the 2012 Presidential election.
Remember the Clinton Administration DOJ blocked the Microsoft-Intuit acquisition in 1995 which prevented the vertical-ization of Microsoft’s OS dominance of the tech sector into other sectors, and successfully sued Microsoft in 1998 for monopolization in bundling its Internet browser into its dominant Windows operating system.
Until EU Competition Commissioner Margrethe Vestager got very serious about Google antitrust enforcement this past year, previously negligent antitrust enforcement authorities facilitated a dominant Google search and search advertising business by approving challenged acquisitions that later proved anticompetitive, and facilitating monopolization of the mobile operating system market by ignoring the anticompetitive bundling ramifications of its dominant search business being contractually tied with Android, Chrome, YouTube, Maps, Play, Gmail, etc. via Android OEM contracts.
Commissioner Vestager’s expected decision in the coming weeks that Google search is indeed dominant at >90% EU market share, and that it has abused its search dominance in preferencing its own shopping service over competitive shopping services, likely will prove to be powerful precedents for the queue of EU and private antitrust complaints lined up to build upon them.
The biggest development everyone appears to be ignoring is the huge anticompetitive implications of Google’s plans to consolidate its Chrome browser-based operating system with its Android mobile operating system this year — per WSJ reporting.
Simply, folding Chrome’s browser-based OS into Android’s App-based mobile OS would create one global, heavily-bundled, Google Inner-net operating system that could auto-default to Google’s: Search, browser, ad-tech platform, Analytics, Translate service, Gmail, YouTube video distribution, Map location services, RCS multimedia messaging services, Apps, Play store, etc.
And Google’s Inner-net operating system default search and browser could then preference or auto-suggest any or all of Google’s 193 products and services including: 23 search tools, 10 advertising services, 33 communications and publishing tools, 15 development tools, 13 map-related products, 7 operating systems, 11 desktop applications, 46 mobile applications, 27 hardware products, and 8 general services.
This pending sweeping opportunity for Google to much more broadly self-deal or preference Google platforms, apps, products, services and tools over competitors’ offerings raises the stakes on whether Commissioner Vestager’s remedy for Google’s abuse of search dominance case will require Google to abide by a firm, enforceable, and accountable, non-discrimination-principle-remedy, like the EU made Microsoft abide by for several years in its antitrust remedy for Microsoft anticompetitively favoring its Explorer browser over competitive browsers.
Ironically, Google will have an especially hard time credibly opposing a future mandate of an EU non-discrimination-principle-remedy for tying its current market-leading Chrome browser to its dominant Android mobile operating system.
That’s because in 2009, Google’s current CEO, Sundar Pichai, helped publicly lobby the EU in a Google blog post stating: “Internet Explorer is tied to Microsoft’s dominant computer operating system, giving it an unfair advantage over other browsers.Compare this to the mobile market, where Microsoft cannot tie Internet Explorer to a dominant operating system, and its browser therefore has a much lower usage.”
In sum, as critically important as the EU’s final decision is on Google search dominance and its abuse of dominance in Google shopping for online businesses dependent on search, the EU’s Android OS tying investigation is as critically important to offline businesses that Alphabet is targeting with disintermediation going forward: ISPs; automakers; manufacturers of drones, robots, wearables, and home energy/automation devices; and biotech, health care, and finance-related companies, among others.
In a nutshell, Google search and search advertising is about dominating the virtual world of the Web and online content of all kinds. One the other hand, Google’s Android operating system/browser is about also dominating the real world of all IP-enabled devices, vehicles, drones, robots, networks, sensors, cameras, microphones, wearables, implants, and the Internet of things.
Any industry in the real world targeted by Alphabet for disintermediation should ask industries in the online world what it is like to try and compete against an unaccountable, dominant, Google global-gatekeeper and biased-broker that self-deals with impunity.
Forewarned is forearmed.
Picture Credits: Danny Oosterveer
One of the key points of the Google antitrust case in Europe is that there are also US companies among the complainants, which contradicts the argument that the EU is adopting a protectionist approach against US innovation, argues MEP Ramon Tremosa.
Have you had any second thoughts about the “Google break-up” motion?
Are we sure Europe is not waging a “protectionist” war against US tech giants as many critics argue?
Ms Vestager has taken an hard line on the Google case. After the first SO sent in April, what do you expect she will do in the following months?
Some critics insist that it remains difficult to determine an anti-competitive behavior in the online search business. What is your view about that?
US tech giants, including Google, are investing more and more millions to influence the European policy. What is your opinion about that?
Ramon Tremosa i Balcells is a Democratic Convergence of Catalonia politician - The Liberal Party in the current government of Cataluña. He follows the Economic and International Trade committee in the EP as well as the USA and Israel Dele. He has a special interest in economics, transport, logistics, trade and competition cases, in particular in the digital market field and the Google antitrust case.
photo credit: brett jordan
EU Commissioner Margrethe Vestager may have been a little too excessive in cautioning about the risk that more consolidation in the European telecoms sector would lead to uncompetitive situations. In fact, the integration between operators is as much necessary as it is a normal market process.
Almost 60 years after the Treaties of Rome were signed the main European weakness remains the lack of a true single market. This is the case in the telecommunications and digital markets, as well as in the railway sector, where different technological standards coupled with national barriers are still preventing a true integration as much as the resulting economies of scale that in these “capital intensive” markets are essential. The consequence, as everyone knows, is that Europe runs more than ever the risk of falling behind competitors that are emerging in the global arena.
The European telecommunications sector, for instance, has seen a far lower growth in investment than in the United States, where in spite of the recent FCC’s decision on Net Neutrality, operators have been able to exploit the very opportunity to have a single market.
Not surprisingly, almost all the large companies in the digital world are based in the US or at least in the Chinese market.
With this in mind it is also obvious that the creation of a proper single European market would entail and favour a certain degree of consolidation within the telecom sector. This is not a bad thing and the EU Commissioner for competition Margrethe Vestager may have been a little too excessive in cautioning about the risk that it would lead to uncompetitive situations. In fact, the integration between operators is as much necessary as it is a normal market process.
In the European market, if a wave of mergers takes place within a true single market, there will be a few European “champions” competing with each other across the borders.
These operators could finally begin to think in a European perspective, taking into account that the competition in the digital market will be both vertical and horizontal. A horizontal competition, in a geographical sense, will take place with the increasingly large Chinese operators, and at the same there will be more vertical competition with all those companies resulting from the tech boom (vd. Google, Facebook).
It is clear that the only way to increase investment in the telecommunications relies on more market integration. In a digital market without less national silos, the presence of larger cross-border players competing with each other should not be feared but is the key to have more investment in place. The digital single market is the only chance for Europe not to miss the train of technological development.
photo credits: Andrea de Poda
What Europe’s tech sector needs is a real pro-growth agenda: bogus antitrust prosecutions against US-based companies will not enhance its ability to innovate and compete — they will only make it more reliant on the whims of bureaucrats.
Last week, as Commissioner Vestager stood at the podium to announce that the EU Commission was finally issuing a Statement of Objections regarding Google’s search practices, long-time commentators of EU competition-policy matters thought back to the infamous Microsoft wars of the early 2000s—not just because it made them feel some ten years younger.
The two cases at hand bear striking similarities: both targeted the most visible company in the computer industry at the time; both were preceded by analogous proceedings in the United States, but ended up following a different path; both focused on extremely sizable market shares, but failed to take into account changes already occurring in the marketplace; and both arguably marked exemplary instances of a politically-oriented approach to the allegedly technical field of competition law.
Indeed, the current Google case seems to rest on shaky foundations—if anything, an investigation that lagged for five years and survived three settlement attempts should be proof of that. According to the Statement, Google favoured its own comparison shopping service at the expense of competing “vertical” services. However, it’s now hard to tell horizontal from vertical search, as they become increasingly intertwined. Long gone is the era when search engines worked as the internet’s yellow pages—and luckily so.
Yesterday, Google’s job was to tell users where they could find answers to their questions; today, Google is in the business of providing them: it looks only natural that those should be Google’s own answers.
But since the Commission launched its investigation, search evolved in another important respect: mobile ate up desktop computer time, apps displaced the browser, the social web did the rest. To be clear, traditional search engines are far from marginal, but they no longer are the primary tools for gathering information, particularly in specialized niches. This applies to Google, as well. For years it’s been said that competition was just a click away: users are now beginning to click away, only in a different direction than expected.
Irrespective of its merits, the case gained momentum over the last few months. In November, the EU Parliament resolution called for the unbundling of search engines. Just days before last week’s Statement of Objections, digital commissioner Oettinger said Europe’s online businesses were “dependent on a few non-EU players world-wide” and urged to “replace today’s Web search engines, operating systems and social networks”.
Europe’s digital shortcomings are a reality, but going after US-based tech companies won’t help overcome them.
In fact, the only industry that stands to benefit from a new season of muscular antitrust enforcement is the lobbying industry. What Europe’s tech sector needs is a real pro-growth agenda: bogus antitrust prosecutions will not enhance its ability to innovate and compete—they will only make it more reliant on the whims of bureaucrats.