In its concern over Google’s market dominance, the EU has focused on the wrong issue. Its ruling won’t benefit consumers and isn’t going to bring CSE business back.
Yes, absurd. That was the first word that came to mind when I read the European Commission’s antitrust ruling against Google and the $2.7 billion fine to go with it on Tuesday. A day or so later, I’d add ill-conceived and misguided to that list.
The ruling was levied against Google for breaching EU antitrust rules by giving “illegal advantages to another Google product: its shopping comparison service. Google must end this conduct within 90 days” or face further penalties, European Commission (EC) competition chief Margrethe Vestage said Tuesday. Google says the EU has not proved damage to consumers or its rivals, namely Amazon and eBay.
The wrong argument
First, let me clearly state that I’m not arguing Google is not dominant. Nor am I arguing that Google doesn’t favor its own shopping results. It clearly does. Because it is a search engine. I’m saying the focus on Shopping is the wrong argument.
This type of product favoritism by a search engine is as old as search engines, as our Greg Sterling pointed out when the EC first brought charges pertaining to Google’s Shopping practices in 2015 and Danny Sullivan spelled out in The Incredible Stupidity Of Investigating Google For Acting Like A Search Engine back in 2010 when the EU first started its antitrust probes into Google.
A good search engine gives users the most relevant results as fast as possible, otherwise users will stop coming to search. Google’s Shopping product has succeeded in that vein (I’ll get back to this). Google also has real competition in this specific area from Amazon, primarily, but also others, including eBay.
When the EC started its multipronged antitrust investigation of Google in 2010, it was little-known comparison shopping engines crying foul that Google was listing product information in a separate section near or at the top of product search results. Individual complainants included Microsoft-owned shopping engine Ciao and price comparison site Foundem.
Google’s Shopping engine is now an entirely advertising-based product most prominently seen in blocks of Product Listing Ads (PLAs) that appear at the top of the search results. In response to the EC ruling, Google’s general council, Kent Walker, said, “Thousands of European merchants use these ads to compete with larger companies like Amazon and eBay.”
And that’s true. Removing the option for merchants to reach users via Google Shopping would be a significant handicap for those that don’t sell on Amazon and eBay. Sure, there are other search engines (that, by the way, also feature their own paid shopping results at the top of the search results pages), but none have the search volume that can drive the sales volume Google can. This leads to where I think the EC’s ruling is misguided.
The EC said that Google has “abused its market dominance in search by promoting its shopping results and demoting its competitors and denied consumers the benefits of competition.”