Electronic marketplace? (App store, Android market, Amazon, ...)

nabeth.thierry's picture
Submitted by nabeth.thierry on Thu, 2012-05-10 14:53

Just dropping an idea here.

Do we have anything about supporting the development of electronic marketplace in Europe, or at least with more important involvement of European companies, as well as government (e.g. regulation)?

By this I am thinking in application or content marketplaces such as App store, Android market, and so on. (Amazon ...)

I believe that these place are becoming increasingly (strategically) important because they represent spaces that are controlled (you have to conform to the acceptance of the marketplace). Besides, there are a lot of economic implications since these place capture a significant portion of the transaction (Apple App charge 30% from the transaction). The future of the publishing industry, and its "digital success" is also very dependent on how they deal with the operators.

Any idea if the European Commission could have something to say and to contribute in this domain and how?

Group audience: 
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Engberg's picture
Submitted by Engberg on Thu, 2012-05-10 17:35

Of course EU needs to get involved - market structures are breakling down and EU hurts the most as europe is the main hunting ground.

The big Appstores are abusing some market control to define unfair requirements - 30% tax and built-in surveillance & behavioural profiling with no competition is not market terms.

What we need to do is to ensure infrastructure and transactions are clearly separated so one cannot be abused to control the other. And yes - technical separation - not merely regulatory.

E.g. Google Search cannot be linked with services on websites (e.g. Google Analytics & Advertisements).

Devices cannot as trojan horses be abused to control transactions. E.g Apple, EMV, mobile Phones, Car-to-x, computers (Un)Trustworthy Computing, PKI-CA units.

Appstores have their uses (updates etc.), but we cannot allow anyone to create walled gardens around winner-takes-all networked effects. We simply need to see this as part of the essential market framework to ensure consuemrs are not taken as captive audience and market control shifted from consuems to some monopolly/kartel structure in infrastructure.

And yes - this would restore not only the media and Digital Services market but ALL market making as it would and should effectively eliminate the "free service for personal data for abuse" models.

Sad that manufacturers cannot get return on investment through abuse of market dominance, but that cannot be avoided. They have to provide services, consumers are willing to pay for - or not do it at all.

And yes that would mean that Social Networks would become less profitable as you either would have to require a paid substriction or do with avertisement without profiling.

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Engberg's picture
Submitted by Engberg on Thu, 2012-05-10 17:42

In other words - EU should NOT do what happened with Roaming charges - trying to fix or cap rates. This kill innovation, raise prices longterm and stalemate the industry for shorterm profits making the entire industry a sitting duck for market reconfiguation as we have seen with the mobile manufacturing that where once big in europe, now almost eliminated.

Instead regulation shall require open technologies & model interfaces that ensure competition - also on innovation. If mobile phones were forced open and allowed to e.g. use wi-fi to circumvent the kartel structure, extreme roaming charges would not be possible.

Now we instead get wi-fi trying to copy the SIM-model. We should ensure competition, not elimiante it.

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nabeth.thierry's picture
Submitted by nabeth.thierry on Thu, 2012-05-10 17:59

>> We should ensure competition, not elimiante it.

Total competition may however not be the more effective approach (for instance in the case of very costly infrastructure by duplicating the work).

It would be good here to get inputs from economists to help advance the discussion.
Any expert in this forum that would like to intervene and propose some good theoretical framework for addressing the subject?

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Engberg's picture
Submitted by Engberg on Sat, 2012-05-12 01:31

It IS the economist view on lock-in technology that prevent innnovation, competion and growth.

You have no reason what-so-ever to assume "very costly infrastructure". What is the meaning of "total competition" except scare of competion and growth?

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nabeth.thierry's picture
Submitted by nabeth.thierry on Wed, 2012-05-23 15:43

Well, that does not mean that we get rid of our critical thinking, and that we accept whatever they said ;-).

I like to think that economics is still a science, and therefore that it can bring an interesting perspective.

Note:
Of interest is for instance the work of economist on (ir)rationality (cf. Georges Akerlof), and complexity (cf. the ideas of Nassim Nicholas Taleb).

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nabeth.thierry's picture
Submitted by nabeth.thierry on Thu, 2012-05-10 18:15

I did a quick search, and indeed not surprisingly, there is some literature on the subject.

For instance:

Roland M. Müller, Bjorn Kijl and Josef K. J. Martens (2011)
A Comparison of Inter-Organizational Business Models of Mobile App Stores: There is more than Open vs. Closed.
Journal of theoretical and applied electronic commerce research vol.6 no.2.
http://www.scielo.cl/scielo.php?pid=S0718-18762011000200007&script=sci_a...

In conclusion ... things are complicated, and the input from experts of the domain would be welcome!

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JacintaArcadia's picture
Submitted by JacintaArcadia on Mon, 2012-05-14 14:48

Dear Thierry & Members,

By the time you have finished this conversation and conducted classical-style research, a person like Christian Kurzke Developer Advocate for Android at Google *available via LinkedIn* has already designed you a New Android App!

The beauty of The Digital World is the technology, software and solutions are fast, and the areas of EU & Internationally you discuss as slow, may feel that way, but Google, Microsoft & Apple and other creators belong to the EU also!

Please Members do contact Christian, so he has evidence of your wish for improvements within the EU!

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griff's picture
Submitted by griff on Mon, 2012-05-14 17:48

JacintaArcadia why isn't Christian from Google participating in this discussion ? :-) it would be nice to see some big player participation.

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nabeth.thierry's picture
Submitted by nabeth.thierry on Mon, 2012-05-14 20:35

Hello JacintaArcadia;

As griff indicated Christian Kurzke is the kind of participant that can bring a lot of value in the discussion (and hopefully also get value from the discussion).
In the case you know him personally you could invite him to participate?
Is there the need for a formal invitation? I believe that an aspect of crowdsourcing is to get rid of too much formality.

>> By the time you have finished this conversation ... has already designed you a New Android App!

Well I do not really understand your point of opposing the two here. It is not a matter of doing one or the other but on doing both, since they fill a different purpose.
Note that what I would be curious to get from Christian is if and what the European Commission could do to facilitate the creation of New Android App! by the community of developers.

On a related topic (the design of applications), I get a little bit concerned by the difficulties for developers to design application for the IPad, because Apple is imposing a lot of control on this system. (technology to use for the design such as objective C, obligation to use app Store, etc...).
Do not get me wrong, in the case of the tablet, Apple did a terrific work with the Ipad, and they are very successful because they designed an exceptional product (and not because of 'manipulating' the market).
As of now, and related to the use of tablets (this is a totally different story for smart phones thanks to Android devices), Ipad is not seriously challenge by any competitors. This is very worrying for instance in the context of Education or for the press sector, which I consider as very strategic sectors.

Maybe you or Christian Kurzke could have ideas on this?
I kind of guess you and Christian are not for regulations that could create rigidity, and that could even backfire.

Thierry

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Engberg's picture
Submitted by Engberg on Sat, 2012-05-26 23:06

OK, let him make a device that enables citizens to engage in commercial transactions without leaking data that can be related to the device or the citizen.

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