Possible WW3 over Digital Ads with Zuck & Google Vs MSFT & Apple
Sometimes, in order to tackle a complicated subject it is necessary, first, to take a step back. For example, before tech and the internet became the dominant economic force it is today there were hundreds, even thousands of companies that had important roles to play in the economy.
Not they other companies are unimportant today, but the sheer scale of trillion dollar (and growing) tech companies such as Google, Facebook who combined represent a near monopoly in digital advertising, and Apple and Microsoft, each also with strangleholds in some markets, but on the outside in the war over digital ad income.
This disparity and imbalance is so massive as to be nearly unprecedented in history. And, now, as the first blind hero worship phase has ended, we are entering a phase where the nearly ubiquitous influence and dominance over lives and fortunes are finally being questioned.
Next up: The war erupting as a result of the extreme correlation between the entrenched and overwhelming dominance of Facebook and Google in digital ads, the income source of media producers, and the near demise of that industry.
The situation has finally become so critical and lopsided that governments are finally stepping in to enforce changes that could never happen while one side, the “dominant digital platforms” holds all the cards and power.
One new axiom that has emerged with the rise of big tech monsters is that only a monster can hope to prevail in a war with another monster. Enter Kong vs Godzilla.
In this emerging world war it is more complicated still; on one side are the parallel duo of Facebook and Google, with similarities in the way they dominate digital advertising, but also in that they share a “surveillance” based business model using private user data to control markets and traffic.
On the other side are Apple, which has staked a claim to user privacy as a means to clearly differentiate a positive product and service based model, Microsoft, that appears to simply want to play the underdog as a search engine alternative to google and a “smaller” player in the digital ad space.
And then, in a corner of distinction above all others, lies the power of world governments.
World governments are playing a pivotal role as a kind of referee – finally stepping in, as the dangers and damage caused already by the duo of Facebook and Google, have awakened the possible regulatory, anti-trust actions that only they can enforce.
First was the rumble down under, now, on to Europe and North America
Even as a kind of truce has erupted in Australia, with the government making specific alterations to the News Media Bargaining Code that, apparently, appeased Facebook enough to withdraw its universal ban on hosting Australian news product.
According to AP News: Google and Facebook, take a combined 81% of online advertising in Australia and initially condemned the code as unworkable.
That has rapidly changed, and the stand-off has come to at least a temporary end.
Also likely, is that the massive demand for an app offering direct access to some of the exact stories that Facebook banned sent a strong enough message that competition for viewers is only one click away.
Motivating the two sides to come to terms and for Facebook to back down from its draconian stance vis-à-vis the new law.
Even as the Aussie skirmish fades a new front in Europe is emerging
In addition to Microsoft, groups involved include the European Publishers Council (EPC), News Media Europe (NME), European Newspaper Publishers’ Association (ENPA), and European Magazine Media Association (EMMA).
Previously, Microsoft had already Earlier this month, Microsoft was lobbying in support of other countries following Australia’s lead in creating legislation mandating that news outlets to be paid for articles published on the platforms in the United States, Canada, the European Union, and other countries.
“We welcome Microsoft’s recognition of the value that our content brings to the core businesses of search engines and social networks because this is where Google and Facebook generate the vast majority of their revenues.
It is crucial that our regulators recognise this key point, and don’t get misled into thinking that side deals on the basis of a stand-alone product are the same thing, because they are not at all and undermine the neighbouring rights that we have been granted. All publishers should get an agreement – no one should be left out”.-CHRISTIAN VAN THILLO, CHAIRMAN OF THE EUROPEAN PUBLISHERS COUNCIL
EPC, NME, ENPA, EMMA, and Microsoft call for arbitration to be implemented in European or national law that requires search engines and media platforms that aggregate news pay for content based on the Publisher‘s Right set out in Directive 2019/790.
Pandora’s Box is open and spilling all over the highway
Interestingly, Microsoft is, in a roundabout and equally self-severing way (according to critics) is now the second trillion dollar tech monster to take a direct stance against Facebook and Google and the monopoly strangle hold the enjoy over the financial life-blood of advertising that is essential for journalism and news production to survive, let alone flourish.
Critics will point out that Microsoft’s Bing search engine with a tiny market share compared to Google (in chart above the ridiculous 90% plus monopoly can be seen) has nothing to lose and everything to gain by supporting government efforts to even the playing field. And Apple? Facebook has already declared war and alleged all sorts of evil motivations for the privacy controls being built into its operating systems.
But that kind of talk is a bit late and weak now that the ultimate tech monster showdown has already begun. The first crack in a flawed and destructive business model, one shared to a great degree by both Facebook and Google has seen its first failure. Many more are yet to come.
And, last but not least, Microsoft and Apple are positioning themselves as the “good guys” and siding with governments and the News production organizations, partly, in order to be seen in a more positive light in case various anti-trust and regularity battles loom between either of them and the governments that are, currently, also investigating all of the giants.
By the way, seen any of Amazon’s recent “we are good guys, despite what you might have heard, seen or experienced” commercials? Small tip: if you have to spend millions on commercials trying to convince people you are not an evil greed-obsessed avaricious crap-ass company then you probably are exactly that.
The horses are out of the barn so grab your popcorn and get ready for this to get strange soon. After Europe Canada and then the US is coming into the ring.
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