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32% of the online advertising sector worldwide and, according to estimates, around 50% in Italy is controlled by Google whose search engine is also the primary source of information for 21.5% of Italian users. But the recent regulatory developments in Italy might hamper Google’s consolidated market position despite of the good outcome of the decision on Internet liability principles just published.
The above information was included in a much broader report issued by the Italian Communications Authority in relation to the sectors of Internet services and online advertising. Also interestingly enough, this report comes after that Google in 2011 had been forced by the Italian Competition Authority to put in place measures in order to avoid abuses of its dominant position with reference to Google News and Google AdSense through:
the setting up of a dedicated software allowing editors to “opt-out” to Google News i.e. to prevent their news to be displayed among Google News results without affecting their indexing among Google Search results and the implementation of a higher level of transparency in the revenue sharing criteria implemented in the management of Google AdSense.
However, the dominance of Google in the Internet market in Italy whose revenues according to the report will of € 59 bn is 2016 representing 3% of the national GDP might be put at risk by the recent regulatory initiatives. Indeed, late last year the Italian Government first announced the introduction of measures aimed at regulating the indexing of online news preventing the free linking currently performed, but such measures were not then adopted.
Also, the Parliament approved the so called Google tax or Web tax which will come into force in July 2014, but its scope and impact on the business of operators selling online ads in very unclear at the moment. It appears as a mere monitoring tool in order to allow the tax authority to check the revenues generated in the country by foreign entities, but according to announcements from Politicians they expect that will lead to higher tax entries.
I will follow the developments on the matter, but feel free to contact me, Giulio Coraggio (giulio.coraggio@gmail.com) to discuss. And follow me on Twitter, Google+ and become one of my friends on LinkedIn.
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