How can we prevent the big Internet platforms from killing off local businesses, with the devastating consequences their disappearance would have on neighbourhoods? The European Association for Digital Transition, in collaboration with the digital newspaper El Confidencial, recently organised a debate on this question in Madrid during the second edition of its campaign, ‘Save your zone’.
Among the people who participated on the panel was Concepción Diaz de Villegas, General Director of Commerce and Hospitality for the Madrid City Council, who explained the position of city hall in defence of local businesses: “It isn’t our job to educate citizens; that would be pretentious. Our job is to help raise their awareness. If you go to Amazon when you need a button, don’t complain when the haberdashery closes down. Citizens need to understand that the type of city they want depends on their buying decisions”, she argued.
The ‘Save your zone’ campaign works along these same lines of raising awareness, explained Ricardo Rodríguez Contreras, President of the EADT. “There’s a problem of concentration of power, which means that small businesses have huge difficulties to compete. We live in a sort of tsunami coming from the big platforms, which have been exploiting legal loopholes to take over markets and prevent competition,” he explained.
The good news is that, as Rodríguez Contreras affirmed, “regulators have now changed their attitude toward the big platforms. Now it’s the consumers’ turn”. From this comes ‘Save your zone’, a campaign that has been launched primarily on social media.
In addition, the EADT has also brought ‘Save your zone’ to local authorities, writing to the mayors of dozens of Spanish cities to ask for a firm and determined commitment in defence of local business.
The power of the algorithm
Also participating on the panel was the economist Javier Santacruz, who stressed the importance of small businesses working together to improve their competitive position against the big platforms. In his opinion, how the algorithms of the e-commerce giants work erodes the consumer’s criteria, which is why it’s necessary to raise awareness.
The speakers agreed that, beyond unbalanced competition in favour of big tech companies, local businesses must refine what they offer to maintain their space when it comes to decision-making by the consumer. Santacruz pointed to product differentiation as key. “In terms of costs, it’s very difficult for them”, he continued, “but they could improve this through collaborative strategies”. Rodríguez Contreras called for local businesses to be able to work on equal terms, and the directive from the Madrid City Council stressed the importance of a shopping experience linked to human warmth, although, as he pointed out, it’s also possible to buy local in the digital environment. “Cities need neighbourhood business, because without businesses they’re dead”, he declared.