How to compete with Google, Amazon or Facebook?

Mark Zuckerberg is watching you.

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• The Economic Analysis Council (CAE) published a note on the regulation of platforms on Thursday.

• It proposes to empower consumers by allowing them to better manage their data.

• The dismantling of platforms is presented as a solution of last resort.

Do an online research, discuss on a social network, order products on the internet ... For each of its actions, names come to mind: Google, Facebook, Amazon.

Ultra-dominant platforms in their sectors, which impose their rules and practices.

To the point of worrying governments: the United States, for example, announced on Wednesday the launch of legal proceedings against Google.

Prosecutors want to seek to demonstrate that the company has strengthened its monopoly on search - 88% of online searches go through Google in the United States - illegally, using its various services (email, maps and GPS. ..) to "trap" users.

In France, the issue of platform regulation is also topical since a note from the Economic Analysis Council (CAE) devoted to this topic was published on Thursday.

The authors examine the causes of the omnipotence of digital players and propose solutions to bring about a little more competition, to the benefit of consumers.

Data at the heart of the dominant model

“Most platforms have developed

algorithms

which bring together supply and demand,” recalls Anne Perrot, economist and co-author of the note.

For example, Booking allows you to find a hotel in a given city.

These algorithms are very expensive to develop, which pushes the company to have a large size to amortize the initial cost ”.

The objective is to attract as many Internet users as possible through the quality of service to trigger a "snowball effect": new Internet users who want to do an internet search or register on a network will turn to a quality service and already used by others, rather than experimenting with something new.

"This effect will favor the largest networks", continues Anne Perrot.

Once the platform is well established, it will do everything to maintain its dominant position.

Google, like others, carries out, for example, “killer acquisitions”, by buying start-ups and other companies that could overshadow it with millions of dollars.

In addition to this predatory tactic, the digital giants rely on another major asset: user data.

“New entrants find themselves faced with platforms that have an enormous amount of data,” explains Anne Perrot.

They will have great difficulty in offering a service of equivalent quality ”.

Indeed, the dominant platforms have the ability to offer personalized searches or suggestions based on the profiles of users that they know perfectly well.

“Personal data is the black gold of the 21st century” abounds Alexandre Lazarègue, lawyer specializing in digital law.

Better regulation for better competition

For the CAE, improving competition in digital technology necessarily involves regulating this data.

“You have to control how platforms collect data and use it to scale, and how other platforms can access that data,” explains Marc Bourreau, co-author of the note.

As the CAE report states, “all new digital services need access to large volumes of data, whether to improve the operation of their service via 

 or to generate revenue. through advertising ”.

In order for these data to be accessible and their collection transparent, the ACE recommends relying on the already existing competition authorities, or creating a new European regulator, which could impose sanctions.

The digital giants would then be forced to promote data interoperability and portability.

Leave with your "identity"

If you don't know these two concepts, don't panic, we'll explain.

Interoperability would allow the user of a platform A to be able to use platform B, without any particular constraint.

For example, in the videoconferencing sector, which has exploded with the coronavirus epidemic, “Zoom allows Skype for Business users to join a virtual meeting, but the reverse is not possible,” notes the CAE.

Likewise, it is possible to open a Word document on the Open Office free software suite, but not the other way around.

Promoting interoperability could therefore allow new platforms to find a place in the sun and avoid forcing Internet users to choose the dominant system.

As for portability, it would allow an Internet user to "start" from a platform with his data and to choose another platform which would offer him better conditions (confidentiality, respect for private life, etc.).

A bit like when we change insurance or bank.

The implementation of the GDPR has already opened the door to this possibility.

The CAE proposes to go further by allowing an Internet user to migrate with his “identity”: “for example, for a LinkedIn user, the cost of migrating to another professional network is not limited to the loss of his profile. personnel, but also of the entire professional network that it has set up and the information it contains ”indicates the report.

It remains to define the contours of this “identity”, which is not an easy task.

Will this be enough to bring out competitors against Google and others?

For Alexandre Lazarègue, we have to go much further.

"We must impose transparency on the tools used by dominant platforms, such as algorithms, so that everyone can use them," he says.

And if the GAFA refuse, then “they will have to be dismantled”.

The operation would consist in cutting up these giants, in separating their activities, to make them less powerful.

The idea is gaining ground in the United States, where several Democratic presidential candidates have mentioned it.

For the CAE, dismantling “is a complex procedure with uncertain results”, which should only be considered “as a last resort”.

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