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Google has been fined a record-breaking sum of €2.4b for violating European antitrust law (European Commission, 2017). Commissioner Margrethe Vestager, in charge of EU competition policy said that “Google has come up with many innovative products and services that have made a difference to our lives” but that the company “abused its market dominance as a search engine by promoting its own comparison shopping service in its search results, and demoting those of competitors” (Boffey, 2017). Google officially responded, stating that: “When you shop online, you want to find the products you’re looking for quickly and easily. Also advertisers want to promote those same products” (Boffey, 2017).

But how did Google become so powerful that they could influence the market so severely? The first crucial observation is that people spend more time online than offline (Davies, 2017). Consequently, companies allocate more resources to online advertisements because they want to spend their advertising money where users spend their time (Forbes, 2015). Google used new technical possibilities as a leverage to capitalize on this trend towards online advertising. First, by enabling advertising companies to track consumers’ behavior on their website and their potential conversion to a sale, companies were able to accurately measure the effects of their ad and target more relevant users. Second, advertisers only pay per impression or click for the ad, ensuring a higher Return on investment (Google, 2017). Online ads therefore become much more attractive to advertisers compared to traditional media.

The ads themselves are sold in a sealed bid second price auction (Vickrey Auction). With prices for Google online ads starting at as little as 1 cent, Google also served those who could not afford the high monetary requirements for traditional advertisement. This low price strategy allowed any company in the world to target any customer and removing all time and location constraints. The result of serving the unserved is a low-end disruption of the traditional advertising industry (Rachleff, 2013).

When a consumer searches something online, his query is matched against keywords and the right ads will be shown. Leaving the consumer with a great browsing experience. On the other end of the value chain, the advertisers are satisfied because optimal targeting increases their ROI and Google is happy because it is generating more revenue.

For the future, it can be expected that as technology and other external factors, such as regulatory constraints further develop, the advertising market will continue to evolve. Market players will react by creating new technologies and acquire emerging companies. However, it is expected that the current „duopoly“ between Facebook and Google continues to exist in the midterm because both companies put an equivalent amount of effort into acquiring new data sources.

Youtube Link: https://youtu.be/X21JhFFVD90

References

Boffey, D. (2017). Google fined record €2.4bn by EU over search engine results. the Guardian. Retrieved 13 October 2017, from https://www.theguardian.com/business/2017/jun/27/google-braces-for-record-breaking-1bn-fine-from-eu

European Commission – PRESS RELEASES – Press release – Antitrust: Commission fines Google €2.42 billion for abusing dominance as search engine by giving illegal advantage to own comparison shopping service. (2017). Europa.eu. Retrieved 13 October 2017, from http://europa.eu/rapid/press-release_IP-17-1784_en.htm

Forbes Welcome. (2017). Forbes.com. Retrieved 13 October 2017, from https://www.forbes.com/sites/greatspeculations/2015/09/28/trends-in-global-advertising-industry-winners-and-losers-part-1/#5c61ef1750ac

Google ads now self-serve. (2017). CNET. Retrieved 13 October 2017, from https://www.cnet.com/news/google-ads-now-self-serve/

Google Launches Self-Service Advertising Program – News announcements – News from Google – Google. (2017). Googlepress.blogspot.nl. Retrieved 13 October 2017, from http://googlepress.blogspot.nl/2000/10/google-launches-self-service.html

Malone, T.W., Yates, J., and Benjamin, R.I. 1987. Electronic Markets and Electronic
Hierarchies. Communications of the ACM 30(6) 484-497.

Setting Up Conversion Goals – Urchin Help. (2017). Support.google.com. Retrieved 13 October 2017, from https://support.google.com/urchin/answer/2618249?hl=en

The global state of digital advertising in 5 charts – Digiday. (2017). Digiday. Retrieved 13 October 2017, from https://digiday.com/uk/global-state-digital-advertising-5-charts/

What “Disrupt” Really Means. (2017). TechCrunch. Retrieved 13 October 2017, from https://techcrunch.com/2013/02/16/the-truth-about-disruption/

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Whether you noticed it or not, artificial intelligence (AI) is influencing our daily life more and more. It is already implemented in your Netflix viewing preferences, your mortgage suitability or in the screening process of you as a potential employee (Markou, 2017). As artificial intelligence is developing rapidly, most sectors are embracing it, so is the legal sector.

Legal services are from a historic point of view, a traditional sector which is very labour-intensive. Especially court trails demand a lot of man-hours. Dutch internet giants like Bol.com and Markplaats already found a solution for this, they implemented ‘e-Courts’, meaning that disputes between two parties are taken care of automatically without any human interference (Van Harskamp, 2017).

The industry for ‘legal tech’ has grown significant the last couple of years. Since 2010 The Netherlands has welcomed almost 90 new companies that totally focus on legal tech. The big law firms also embraced it. The only struggle for now: relevant data. The data is there, but not accessible for everyone. The companies who own the data, keep it for themselves. A general database, with all relevant data in it, could solve this problem. To achieve this, companies need to realise that sharing their data is in the first place beneficial for themselves.

Not only in The Netherlands legal tech is trending, in the United States and the United Kingdom the same thing is happening. In the US they developed a tool named ‘Ross’, which helps lawyers predict the best possible verdict. The University College London has a similar tool, which helps to predict the results of real life cases (Johnston, 2016).

Although these current developments might only look beneficial, this is not the case for everyone. A lot of small legal firms are worried that they will bear the brunt. They don’t have the resources to compete against the big firms, which easily can make large investments. Besides that, the small legal firms also fear start-ups which are fully tech focused and therefore can compete on price. (Betlem & Broekhuizen, 2017)

Technological advancements seem inevitable in the old-fashioned sector of legal services. Legal tech is something that is trendier than ever and the first real life adaptions are getting visible. These advancements however also bring potential downsides along the ride. No doubt that technology will take over the sector, the only question is when and at what price. The robot judge is just around the corner, however human interference should never be underestimated.

References

Betlem, R. & Broekhuizen K. (2017) Tech bedreigt kleine advocatenkantoren, Financieel Dagblad, https://www.fd.nl/morgen/1219629/tech-bedreigt-kleine-advocatenkantoren , 8th of October 2017.

Johnston, C. (2016) Artificial intelligence ‘judge’ developed by UCL computer scientists, The Guardian, http://www.independent.co.uk/life-style/gadgets-and-tech/news/ai-judge-robot-european-court-of-human-rights-law-verdicts-artificial-intelligence-a7377351.html , 7^th of October 2017.

Markou, C. (2017) Are We Ready for Robot Judges?, Discover, http://blogs.discovermagazine.com/crux/2017/05/16/are-we-ready-for-robot-judges/#.WdjSCWhL9PY, 7^th of October 2017.

Van Harskamp, G. (2017) ‘Robotrechter komt eraan’, De Telegraaf, https://www.telegraaf.nl/financieel/366728/robotrechter-komt-eraan, 7^th of October 2017.

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Tesla has been known for turning the automotive industry upside down (iConic, 2016). For years now Tesla is basically the only option for a fully electrical vehicle with an extensive range. Besides this, they have been seriously piloting with self-driving vehicles. Meaning that a Tesla is loaded with high-tech hard- and software and continuously connected with the HQ of Tesla. This might feel in favor of their customers, but is it?

During hurricane Irma, Tesla remotely extended the range of all Tesla vehicles around Florida with a 60-kilo-watt hour battery (AD, 2017). Around the year 2006 Tesla gave customers the choice to buy a 60-kilo-watt hours battery pack or, for several thousand dollars more, a 75-kilo-watt hours battery pack. Remarkable is that these two types are hardware wise the same. The only difference is the software itself. With the extended battery package, your range will increase with about 50 kilometres (USA Today, 2017).

The only thing Tesla needed to do is to activate the software and all Tesla drivers located in the Florida area would suddenly have an extended range to ‘’get away’’ from the hurricane. At first sight, this might look very generous of Tesla, however there are a few aspects that need to be considered here. First, why did customers need to pay several thousand dollars more for a simple software upgrade, knowing that the hardware of the vehicle is the same (Bloomberg, 2017). Besides that, this ‘generous’ gift of Tesla, almost costed them noting.

The second concern would be ownership, since Tesla can simply remotely configure your vehicle. This is raising the question who the real owner of the vehicle is, since you, as a driver, cannot really do anything about it. This puts Tesla in a powerful position. Another concern is privacy, knowing that your vehicle is 24/7 connected with the control room of Tesla. The amount of data they could have gathered about you probably will be impressive. Who knows what Tesla is going to do with all this data.

Tesla might always be a step ahead, providing customers with something that feels like value added for them, but in fact in the future is only beneficial for Tesla itself. You better think twice, when Tesla announces something new. Who knows what they are up to and will we even be involved in it?

References

Agrawal, A.J. (2016) How Tesla Has Turned the Auto Industry Upside Down, iConic, https://www.inc.com/aj-agrawal/how-tesla-has-turned-the-auto-industry-upside-down.html, 20^th of September 2017.

Bremmer, D. (2017) Dezelfde Tesla, maar toch slechter, Algemeen Dagblad, https://www.ad.nl/economie/dezelfde-tesla-maar-toch-slechter~ace1b349/?utm_source=whatsapp&utm_medium=social&utm_campaign=socialsharing_app, 20^th of September 2017.

Bullard, N. (2017) Tesla’s Irma Aid Hints at the Future of Connected Cars, Bloomberg, https://www.bloomberg.com/view/articles/2017-09-15/tesla-s-irma-aid-hints-at-the-future-of-connected-cars, 20^th of September 2017.

Della Cava, M. (2017) Your Tesla may have secret powers, USA Today, https://www.usatoday.com/story/money/cars/2017/09/11/tesla-offers-irma-fleeing-owners-temporary-range-boost/653684001/, 20^th of September 2017.