Margrethe Vestager, the European commissioner for competition, says the government has to move fast to ensure that tech does not subvert society. Presumably, she means the European government.

“…as it becomes clearer how those companies were used to manipulate the 2016 U.S. elections, Vestager feels validated in her distrust of Silicon Valley’s power…”

The quotes come from a podcast interview. It shows Europe, or at least Europe’s competition regulator, is moving in a different direction to the USA and Asia. On the surface at least, these regions seem more comfortable with power being concentrated in fewer hands.

European market

“We want a free market, but we know that the paradox of a ‘free’ market is that sometimes you have to intervene. You have to make sure it’s not the law of the jungle, but the laws of democracy that works.”

Vestager said her commission will continue to focus on preventing large tech incumbents like Google from stifling competition from startups. She also has misgivings about the secrecy surrounding the algorithms that power much of the internet.

“I think some of these algorithms, they’ll have to go to law school before they’re let out. You cannot just say, ‘What happens in the black box stays in the black box.’ You have to teach your algorithm what it can do and what it cannot do, because otherwise there is a risk that the algorithms will learn the tricks of the old cartels.”

While it is easy to identify problems caused by tech companies, fixing them looks harder. Regulating for greater competition is a start, so is transparency, yet, for now, the tech giants have momentum.

Source: Europe’s chief regulator Margrethe Vestager on reining in tech: ‘This is the biggest wake-up call we’ve ever had’ – Recode

Also on:

nest smart homeNest, the smart thermostat maker Google acquired in 2014, is the world’s best-known home automation brand. The company is now selling its smart home products and services in New Zealand.

Smart home technology has been slow to take off around the world. It gets the attention from technology fetishists, but, despite years of hype and marketing, has yet to break into the mainstream. It remains a tiny niche.

Take Nest’s thermostats. They look good. They get rave reviews in technology publications. Users swear they can save hundreds on their power bills with them. Yet Google only sold 1.3 million in 2015.

To put things in perspective, Apple sold 6 million Watches in three months during the same year.

Nest performances disappointing

Some analysts report Google is disappointed with Nest’s performance to date. It looks a long way from recovering the US$3.2 billion it paid for Nest and the US$550 million it paid for Dropcam, which makes home security cameras. The two brands have since been merged.

That doesn’t mean Google’s investment will never pay off. Nest sits alongside Google’s Speaker and Chromecast.

All are part of a “connected home” strategy. The idea is that you can speak to tell Google to turn up the heat and get the devices to display your camera’s security images on your TV via Chromecast. On a good day, it all works.

Smart home still immature

Home automation is still in its infancy. About one in 20 US homes have one or more smart home components. Hardly any have a full suite.

The numbers will be far lower in New Zealand. Apart from anything else, few New Zealand homes have the kind of central heating system that can make full use of a Nest controller.

What’s more the Unisys Security Index shows we’re wary of the Internet of Things. There’s a huge potential for the Internet of Things to make smart home devices even smarter, but for now that’s not happening fast enough.

While companies are quick to embrace the IoT technology that uses sensors, communications, computing and automation to save money or speed processes, doing the same things at home feels like playing with toys.

Your idea of fun?

Make no mistake, home automation vendors are on to this, they often talk about their products being ‘fun’ or use similar language. They also like to use fear to sell. The curious press release from Google about Nest’s New Zealand launch is full of words like ‘worry’, ‘stolen’ and ‘safe’.

Not that there’s anything wrong with home security, but Google lays it on thick.

Nest gets around two of the biggest objections to home automation. First, most smart home products are too expensive to take seriously. Who in their right mind would spend more on an intelligent fridge than a new car?

There are three Nest cameras. With prices between $360 and $550 they are not cheap, you can buy cameras for a tenth of that. Likewise the $220 smoke alarm. You can buy an unconnected one in Mitre 10 for about $10. Yet, these are small investments to get started with home automation.

The second object is that home automation technology is too hard to use or install and the parts don’t tend to work well with each other. Nest gets around this.

Simple, needs to be simpler

When Google wraps the technology in with its Speaker and Chromecast things will be even simpler. Where this leaves households with Amazon or Apple technology is another question.

Perhaps a more pressing question is what are the consequences of huge technology giants like Google owning the home automation market? There will be privacy concerns and the problems associated with technology lock-in, switching from a Google home to, say, an Amazon one would be difficult.

Another issue is where is the business model here? Google didn’t spend the thick end of half a trillion dollars to flog home gadgets. It wants more back from Nest than hardware sales. How will that work for the company and, more to the point, how will that business model work for you?

Also on:

Don Christie - Brandon Keepers

Don Christie writes in the New Zealand Herald Global IT companies are taking profit here and putting nothing back:

An organisation I co-chair, NZRise, has been looking at the problem. We represent New Zealand owned digital companies who generate jobs and good incomes for tens of thousands of Kiwis. Our research shows Facebook, Google, Amazon and many other global digital companies are engaged in similar tax avoidance schemes to Apple.

Most revenues that accrue to those companies from New Zealand simply don’t get reported. They are the result of an online transaction and the money flies out of the country in the blink of an eye. No tax. No multiplier effect. No 41 per cent investment into our society.

From a business owner’s perspective it also represents a huge disincentive to invest in R&D, which is already at shockingly low levels by international standards. We find ourselves at a disadvantage to our multinational competitors.

Why create software and technical services in New Zealand when we will always be facing uneven tax playing field?

New Zealand has had a problem with multinational companies and transfer pricing for decades.

Yet the problem Christie writes about is on a different scale.

While the old multinational would shuffle money to minimise liabilities in New Zealand, they still paid some tax. They employed people, trained people and contributed to the economy in other ways. They funded university chairs, sports clubs and other worthy causes. If the new breed does any of that, it’s invisible.

Little contribution

The new multinationals pay next to no tax. They employ next to no New Zealanders. They contribute little to the economy.

Sure, you can argue that Apple products make New Zealanders more productive and that’s a positive economic contribution. The net positive economic contribution may even be greater than Apple fails to contribute in more direct ways.

That is an argument against banning or boycotting Apple products. No-one is suggesting that.

It is not an argument against taxing Apple.

After all, our roads carry Apple products to market. Our schools give people the skills people need to use Apple products. Our health system keeps Apple’s customers alive and healthy. In some cases our tax dollars buy Apple products.

Google this!

You could argue something similar about Google. Some believe Google software makes workers more productive than they would be with other software. Maybe.

Some think that Google’s activities in the advertising sector has an economic benefit. Try saying that to a New Zealand journalist or someone who works in the media.

Again, these are not arguments against taxing Google.

Google is quite happy to sell its products and services to New Zealand government departments that it doesn’t help fund.

It’s harder to argue Facebook offers any economic benefits to New Zealand. If anything it undermines productivity. It is the digital equivalent of an all-sugar diet.

Christie has a good point

There’s little change Apple, Facebook and Google will stop selling in New Zealand if we force them to pull their economic weight.

Until recently the problem was limited. Most of the non-contributors were technology companies. That’s changing with services like Uber muscling in on our markets. If things continue our economy will be hollowed out. Let’s not allow that to happen.

It’s been said that what the companies do is legal. That’s true. It doesn’t make it right. We have the power to change that. We have left this problem in the too hard basket for too long.

google pixel

New Zealand is not among the first countries to get the Google Pixel phones. The US, UK, Canada, Australia, Germany and India are all ahead of us in the queue.

Google says it plans to sell the phones in more countries, but offers no further details. There’s also no news about when the creepy Google Home speaker will come here.

The marketing says the phones are made by Google. That’s not true. HTC makes them. The company struggles to sell phones under its own name, so the contract will be a relief.

Google Pixel priced like Apple

Google is betting its brand carries as much weight with customers as Apple or Samsung. It asks Apple and Samsung-like prices.

In the US, the cheapest Pixel costs US$650. That’s the same as the cheapest Apple iPhone 7. Samsung prices are similar.

Google propaganda says it “obsessed over every detail, from the industry design to the user experience” of the Pixels.

The words sound like something Steve Jobs might have said.

Guru

The phones include a 12.3 mega-pixel camera. Google says its “photography gurus” spent a year optimising the camera. There’s also a quick-charge battery that can deliver 7 hours of use on a charge of 15 minutes.

That’s useful if you forget to charge overnight and need to get to work in a hurry.

Google’s latest foray into branded hardware follows earlier failures. Google Glass was a flop. The brief dalliance with Motorola was unhappy. Google bought Nest but failed to capitalise on it.

On the other hand, the earlier Google-branded Nexus phones are among the best Androids.

Not really about hardware

Most of the attention on the Pixel phone announcement centres on yet another Google move into hardware.

The company sees integrating phone hardware and software, in the way Apple does with the iPhone, gives it an edge over other phone makers.

This integration is an idea Google had been quick to dismiss in the past.

It may not have escaped your attention that those other phone makers are supposed to be Google’s partners. They are the companies who make Android phones.

Tension in the Android camp

To suggest this could be a source of tension between Google and the companies making Android phones is putting it mildly.

Relationships between Google and phone makers, especially Samsung, have never been entirely cordial. But this is a stab in the back.

When Microsoft first moved into hardware with the Surface Pro tablets it did not to tread on its partners’ toes. It made soothing noises about its strategy. Officially the Surface was only there to show them the way.

Even today Microsoft chooses not to compete head-on with the big PC maker’s main product lines.

How to win friends and influence them

In contrast Google seems content to trample on partners. One fear is that it wants to displace its Android partners in their relationships with mobile carriers. In Australia Google formed an exclusive relationship with Telstra – that’s moving right in on Samsung’s turf.

At the same time it seems to be undermining the Android value chain.

As you’d expect from Google, the Pixel phones are more about software than hardware.

Google Assistant, an artificial intelligence-based digital assistant, is preloaded on Pixel phones.

Siri competition

On one level Google Assistant is a direct competitor with Apple’s Siri. The phone software is, in effect, a client to back-end services provided by Google. It is a way of tieing the hardware more closely to the search giant.

Google Assistant also cuts rival phone makers out of an important part of the value chain. It links straight back to Google’s data centres. It leaves little room for other Android phone makers to enter the services market.

If phone makers lie awake at night worrying about Pixel, privacy advocates and, perhaps the rest of us, will lose sleep over Google’s surveillance.

Data mining

The new Pixel phones are one part of a strategy to help Google collect more data and more intimate data than ever before.

At the same announcement the company took the wraps off Google Home. It is a home speaker with a built-in microphone. Home includes a voice-activated version of Google Assistant and can link to internet-of-things devices in your home.

Google Home is always listening. It is the ultimate surveillance devices prettied up as a domestic appliance. It would require a near impossible feat of willpower not to feed it with a constant steam of the most personal and intimate data.

When George Orwell wrote 1984 he never dreamed that Big Brother could get citizens to buy the listening devices spying on them. The idea of then earning billions by using it to learn their preferences and selling them more things was beyond belief.

The clever-sounding artificial intelligence Google talks of isn’t there to help you. It’s not to make life better, to ease your burdens. It exists to mine your most intimate data then sell it to retailers who can turn it into gold.

If that doesn’t worry you, nothing will.