Sunday 25 August 2019

Telecoms boss Malone predicts Google will be undone by abuses of digital search market

John Malone. Photo: Reuters
John Malone. Photo: Reuters
Jane Last

Jane Last

The Irish telecoms and media billionaire John Malone has predicted Google will be broken up by competition watchdogs to curb its dominance online.

Malone, chairman of European cable giant Liberty Global, which owns Virgin Media, the broadcaster Discovery, travel website TripAdvisor and Hollywood studio Lionsgate, said Google would in future not be allowed to offer other services on top of its monopoly on web search.

"In my opinion, Google will be broken up and will not be allowed to go vertical on services, anything in which they control the search algorithm and figure out - presenting it to the consumer," he said.

The 77-year-old made the forecast at a private event for Virgin Media staff in Dublin in July. British newspaper The Sunday Telegraph obtained a transcript of his comments.

Mr Malone said Google's ability to use its search engine to steer web traffic away from rivals in neighbouring digital markets would be its undoing.

Google denies such behaviour, but was last year found by European watchdogs to have abused its dominance of search to crush its competition in shopping comparison and was fined more than €2.4bn.

"We own a company called TripAdvisor. When you go on a mobile site, you might get two or three results of a search," said Mr Malone.

"For a company that is quite dependent on getting its traffic from search, when Google decides they're going to change their algorithm... game over.

"Now, I don't think that can sustain. I think that will ultimately fail."

Mr Malone also answered questions over the threat to traditional television from Netflix and other streaming-players.

He said attempts by Hollywood studios to gain heft via the merger of 21st Century Fox and Disney, and the battle between Disney and Comcast to take over Sky, were "late to the party".

"In my opinion it's being driven by a phenomenon of disintermediation that's taking place where Amazon and Netflix are going to the writers and the producers and the directors and saying 'what do you need the studio for?'. The traditional role of the studio was to finance ideas and then distribute.

"Both of those are better done, at least in [Netflix chief executive] Reed Hastings's mind, by Reed Hastings.

"So, as a result, somebody like Rupert [Murdoch] is looking at the future and saying this content is either going to cost me a lot more money to create, and I still might not be successful, or I've got to take my assets, put them - together with Disney's and maybe together we have enough scale that we can play in that global game. But, you know, they are late to the party. So it's going to be an interesting phenomenon."

Last week, TV3 was rebranded as Virgin Media.

Liberty Global bought TV3 in 2015 for €87m.

In July, Liberty Global CEO Mike Fries said it injected "€10m to €15m" into the Irish broadcaster to drive a turnaround.

Mr Fries said the investment "had really moved the needle" and the broadcaster was making money in its own right.

Sunday Independent

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