Issue 6- On antitrust laws, podcasts, and marketing beyond borders.
In today's Finshots Brief, we will talk about
- Why the US is launching an antitrust case against Google
- Spotify's latest plans for its podcasts
- Estee Lauder's out-of-the-world marketing campaign
Google’s upcoming Antitrust case
Of late, Google’s enormous size and market dominance has been of grave concern to the US government. The behemoth’s consumer offerings include a ubiquitous search engine, widely used maps, a popular video platform, and an Android operating system used in about 90% of all smartphones. Rivals have often complained that Google uses these all-pervasive services to snuff out competition. The US government has been taking these allegations very seriously and is now set to launch an antitrust case against the giant in an attempt to prevent monopolization.
Here’s what this whole thing is about:
Web Searches
Whenever most people want to look up a new recipe, self-diagnose their cold symptoms, or read up on the latest political issue gripping the nation, Google search is where they go. In the US, Google is responsible for 90% of all online searches. These searches, in turn, are primarily responsible for the company’s massive advertising business. Oh, and they also happen to be the key focus of the lawsuit.
You see, competitors have accused Google of displaying search bias. The search giant likes to put its own products- like local business listings- at the forefront of search results, so that it appears before that of rivals. Apart from this, it also uses content from other websites to give users answers to commonly asked questions directly on the search results page, instead of just providing links to the sites. This reduces traffic for these content providers, understandably pissing them off.
Then there’s search distribution. This refers to Google’s practice of signing exclusive contracts with device makers to provide its search engine to users as a default option. For instance, in 2018, Google paid Apple $9 billion to get its search engine on the Safari web browser- something smaller competitors don’t have the resources to do.
In a similar vein, there’s the Android issue. Google owns this operating system, which powers 9 out of 10 smartphones globally. And so, the company is in a position to force phone makers to pre-install its browser and search bar into their devices- a practice which majorly restricts competitors from reaching the same users.
Advertisements
Another highly problematic area is Google’s dominance over ads on third-party sites, i.e. outside of search results or other google websites. These are the ads that usually pop-up on the margins when you’re trying to read an article online. Anyway, through some strategic acquisitions, Google has made it impossible for advertisers and publishers (the website on which you see the ad) to do business directly with each other- it’s mostly routed through Google. And this gives the tech giant the ability to inflate the price of ads. Totally unfair, right?
Google doesn’t think so. In a blog post on competition issues, Google had this to say- “Our products increase choice and expand competition. They level the playing field for small businesses everywhere—enabling them to sell their products, find customers, reduce their costs and, in difficult times, get back on their feet.”
Make of it what you will.
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Spotify is going to mainstream media
As you know, Spotify started off as a music streaming service. But lately, the company has been investing hundreds of millions of dollars into producing original podcasts. The thing is, music licensing costs are exorbitant and they've been looking to make money without having to negotiate with thousands of artists and music production companies. So podcasts make sense.
However now, Spotify is going to use this library of original podcasts to cash in on potential film and TV projects. The company recently signed a deal with Chernin Entertainment, giving the producer of movies like The Greatest Showman and Ford vs Ferrari the chance to give its audio shows a new Hollywood-style makeover.
Chernin Entertainment certainly seems excited about the deal. Here’s what they had to say- “Audio is by far the fastest-growing medium in the entertainment business, and with over 250 originals and thousands of hours of content, Spotify has one of the largest libraries of unattached IP that exists in the world today.”
Estee Lauder’s out-of-the-world campaign
The coronavirus pandemic has pushed millions of people into unemployment and generally deteriorated incomes across the board. Consumers are just not spending like they used to on things they don’t strictly need. And this new climate has forced beauty brands to get more innovative with their advertisements.
So now, Estee Lauder has introduced an out-of-this-world idea to talk about its skincare innovation i.e. It’s all set to be the first beauty brand to go into space.
The cosmetics company is paying NASA $128,000 to fly 10 bottles of its new skin serums to the International Space Station. There, astronauts will take pictures with the product in a control tower which has a mesmerizing view of the galaxy. The images will be published far and wide on social media. And once the bottles return to Earth next year, Estee Lauder will auction one of them off to charity.
As for NASA, they’ve been wanting to commercialize low-earth orbit for a while now. Through this campaign, they’ll be able to further push space as a place where private companies can do business.
Lockdown Protests
Coronavirus cases have surged in several European countries, leading governments to impose certain restrictions on their populations. But people are frustrated, and many of them are now taking to the streets to express their dissent- without masks. Learn more.
More Funds for Flipkart
Walmart has pumped a further $560 million in Flipkart, after investing $560 million in the firm in July. This might be the last private funding round for the e-commerce giant as it plans to go public in 2021. Know more.
Amazon’s Handicrafts Mela
On Saturday, Amazon announced that it will host a virtual Handicrafts Mela from September 26th to October 10th. This will help customers discover and purchase products from thousands of artisans and weavers across the country. Find out more.
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-Written by Vedika Agarwal