Is Google Getting A Warning From Tesco?

When I've been asked to explain the Google anti-trust moves forging ahead at the EU Commission, I usually explain it in supermarket terms and often in terms of Tesco. Picture Google, I usually start off, as being Tesco -- which is running pretty much the only supermarket in town that has taken in the florist, cobbler, butcher, baker, fishmonger and candlestick maker. Only it's a bit more complicated. Just imagine it had a shopping centre mentality and had let those local shops pitch up stalls in their local supermarket. Imagine how annoyed they'd be if the supermarket then started to launch its own florist, butcher and bakery stalls in front of them in positions right by the front door that the tradesmen of the town don't have access to.

There in a nutshell is my hook on the issue facing Google and the reasons for the opposition to it. Let's not suggest that Google is guilty of anything right now because that is for the European Commission to decide. But let's agree that the analogy just made is the reason for the disquiet.

It's pretty much a Tesco story too, which is why I bring it up today. The supermarket was the first to try to dominate every possible avenue for squeezing a buck out of the high street into their stores. It saw diversification in to its own brand labels and kiosks within megastores, as well as small city stores, as the way forward. It even went out and bought a video streaming service, Blinkbox, and a data cruncher, Dunnhumby. Given that it was a loyalty card pioneer, a company that can crunch Big Data might not seem too odd a step, but a video streaming company? 

Thus, it's little surprise that today it has announced store closures and the sale of Blinkbox and broadband service as well as the likely sale of Dunnhumby (WPP is eyeing up the coveted asset, you may recall).

The point for mentioning all this is after dominating the high street Tesco is experiencing a massive fall from grace. While it saw itself as pioneering moves into new avenues it had every right to exploit, customers were left wondering whether it all wasn't just a little bit greedy. Did they really need to buy car insurance, banking, credit cards, broadband, mobile phone airtime, broadband connections and movie streaming in the same basket as their bananas and washing detergent? Then there was the horsemeat scandal followed by the financial irregularities of last year.

Thus, one of the most interesting points made this morning by commentators looking at festive figures that are only marginally down is whether the whole episode shows there wasn't as much love for the Tesco brand out there as perhaps the top executives believed.

Could the same happen to Google? Its 90% market share of Internet search in the UK is staggering and the way it has been adding its verticals of flight, shopping, maps, price comparison and knowledge graph to its search results has meant that people are being able to do a lot more these days on the home page than before without the need to click through to a third party. That would undoubtedly feel useful for consumers but there is a counter argument that it is anti-competitive and stifling consumer choice. 

Throw in the Internet giant's laughable tax position in to the equation, which is made all the more funny by the fact they appear to be breaking no rules by doing a Starbucks and channeling money from where it is spent in to lower taxation regimes (i.e., Dublin and Luxembourg), However, legal or not, the public is noticeably angry and they are becoming more concerned about privacy policies from the American internet giants which are being taken to task by individual EU member states' governments.

On the anti-competition front, Google is expected to know which way the wind is blowing in the coming months. Should it be a harsh wind that blows, the big problem it could face is not just a huge fine and some form of structural change to how it operates in the UK, it just might find that it shares Tesco's fate. In a bid to be all things to all people, it just might have found it has annoyed more people than it expected and, given a choice, more people just may consider using comparison sites and the other services it has drawn in to its search results. 

Tesco moved from being an applauded pioneer on the high street to being seen as a bit greedy and perhaps cutting financial corners to appear to look good. If this is ringing any bells at Google it's for the very good reason that it should.

1 comment about "Is Google Getting A Warning From Tesco?".
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  1. Alistair Kelman from Cachebox TV Ltd, January 8, 2015 at 9:39 a.m.

    Sean - can you contact me? I have a major story for you regarding this industry?

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