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The European Commission is facing fresh calls to make good on its 2017 antitrust decision against Google Shopping by banning Google from displaying its own shopping comparison ads units in search results \u2014 boxes which Google populates with revenue-generating ads \u2014 as they argue the self-preferencing units constitute an ongoing competition abuse by the adtech giant.<\/p>\n
The 2017 Commission decision found Google abused its dominance by systematically giving prominent placement to its own comparison shopping service and demoting rival comparison shopping services in search results. <\/span><\/p>\n Google was left to devise its own remedy to comply with the order to cease infringing the bloc\u2019s competition rules and rivals have continued to complain there is still no level playing field for shopping comparison services trying to reach consumers via Google\u2019s dominant search channel.\u00a0<\/span><\/p>\n Yesterday Reuters reported that more than 40 rival comparison shopping services (CSS) operating across Europe \u2014 including Kelkoo, PriceRunner and idealo \u2014 had written to Commission EVP, Margrethe Vestager, accusing Google of continued non-compliance with the 2017 EU order.<\/p>\n The companies are calling for the Commission to step in and close down Google\u2019s Shopping Units \u2014 arguing that the mechanism it devised following the original antitrust decision \u201callow[s] no competition\u201d and leads to \u201chigher prices and less choice for consumers\u201d, as well as enabling what they describe as an \u201cunfair transfer of profits\u201d to Google.<\/p>\n \u201cToday, there is clear evidence that Google\u2019s chosen mechanism to comply with the Google Search (Shopping) decision is both economically ineffective and legally insufficient,\u201d they add.<\/p>\n In a letter that stretches over 7-pages, which has reviewed, the CSS also make a case for the Commission to act against Google\u2019s self-preferencing ahead of the incoming EU Digital Markets Act (DMA) \u2014 which will bring in an up-front ban on self-preferencing by the most powerful intermediating platforms (so-called \u201cgatekeepers\u201d), starting next year \u2014 arguing that: \u201cGoogle\u2019s prominent embedding of Shopping Units is a prima facie infringement of the DMA\u2019s ban on self-preferencing.\u201d<\/span><\/p>\n Google is widely expected to be designated a gatekeeper, and Google search a core platform service, under the DMA when the regime starts operating in 2023 \u2014 although it\u2019s not clear how quickly these designations will happen (months at least will be required).<\/p>\n Evidently, the 40+ CSS are tired of hanging around waiting for the Commission to enforce a level playing field for shopping comparison services after five years of being frustrated by Google\u2019s self-interested shaping of product search results.<\/p>\n Last November, the tech giant\u2019s appeal against the 2017 EU decision was largely dismissed by the General Court which also made a critical assessment of its use of Shopping Units which it said depended on comparison shopping services changing their business model and \u201cceasing to be Google\u2019s direct competitors, becoming its customers instead.\u201d<\/p>\n While an investigation by Sky News, back in 2018, accused Google of trying to circumvent the EU antitrust ruling by offering incentives to ad agencies to create faux comparison sites filled with ads for their clients\u2019 products which Google could display in the Shopping Units to present the impression of a thriving marketplace for price comparison services.<\/p>\n Separately, PriceRunner announced a competition lawsuit against Google earlier this year \u2014 seeking \u20ac2.1 billion in damages for what it alleges is continued non-compliance of the 2017 Google Shopping decision.<\/p>\n \u201cOur industry has been stalled by Google\u2019s confirmed abuse and the subsequent non-compliance for over 13 years. The Commission needs to re-open space on general search results pages for the most relevant providers, by removing Google\u2019s Shopping Units that allow no competition but lead to higher prices and less choice for consumers and an unfair transfer of profit margins from merchants and competing CSSs to Google,\u201d the CSS write in their letter to the Commission now.<\/p>\n \u201cWe have patiently waited for the General Court\u2019s endorsement of the Shopping decision and the DMA\u2019s ban on self-preferencing and assisted you along the way. Considering the unambiguous new legal framework, it is now time to walk the talk. The most paramount case at the heart of the calls for the DMA needs to be brought to an effective end. We have weighed up all alternative solutions but came to agree with Recital (51) DMA: the only effective end is that Google no longer displays groups of specialised search results that enable the comparison of products and prices directly within Google\u2019s general results pages. Shopping Units need to go.\u201d<\/p>\n<\/div>\n<\/div>\n<\/div>\n The disputed Shopping Units appear in Google search results in response to certain types of product search \u2014 such as the below example generated by a search for \u201ccheapest iPhone\u201d \u2014 and may link users to rival comparison services. However third parties must bid to win slots in the ad units which means that if a CSS is successful in a Shopping Unit ad auction it is paying Google to appear in an advertisement that it typically locates at the top of search results, above organic results where shopping comparison services might otherwise be displayed more prominently on the merits of their utility.<\/p>\n Screengrab: Natasha Lomas\/<\/p>\n<\/div>\n \u00a0<\/p>\n The CSS argue that Google\u2019s mechanism is skewed against genuine produce comparison services \u2014 favoring ad resellers that do not compete directly with Google in comparison shopping search.<\/p>\n \u201cEmpirical data confirms that Google\u2019s mechanism requires a market exit. According to a study of over one million Shopping Units in Summer 2022, \u201893% of Google Shopping ads in Shopping Units are published by just the top 20 [Google] CSS partners\u2019. Yet \u2018the top 20 CSS partners only account for 1.4% of organic search results for the dataset\u2019. This is \u2018because these CSS partners primarily facilitate Google Shopping Units \u2014 they don\u2019t offer an online product comparison service themselves\u2019,\u201d they write.<\/p>\n \u201cPut differently, today 93% of the offers in Shopping Units originate from companies that do not compete with Google on any relevant market for comparison shopping services but that have become mere resellers of Google Shopping Ads which they buy at a marginal profit on behalf of merchants. Shopping Units thus continue to constitute a Google-own CSS that is favoured within general search results pages.\u201d<\/p>\n Google injects Shopping Units into search results for many types of products and services, from price comparison-focused electronic gadgetry to vacation accommodation, travel and jobs \u2014 and the CSS go on to suggest in their letter that players across other verticals \u201cshare our concerns and equally call for an end of Google\u2019s boxes\u201d, adding: \u201cEnforcing compliance with the Shopping remedy will thus have an impact far beyond markets for comparison shopping. Conversely, any failure to act resolutely would only invite even more abuses of dominance.\u201d<\/p>\n<\/div>\n<\/div>\n<\/div>\n An auction mechanism Google devised following another Commission antitrust decision \u2014 back in 2018, against its Android smartphone platform \u2014 which saw rival search engines being required to bid in a paid Google auction to appear in a regional \u2018choice screen\u2019 on Android devices was similarly criticized \u2014 for years \u2014 as self-serving faux compliance by Google (and an ongoing failure of EU antitrust enforcement).<\/p>\n In that case the Commission did ultimately step in, last year, forcing Google to revise its approach by ditching the paid auction and displaying a selection of rival search engines that\u2019s free for eligible participants, largely based on popularity per market. But search rivals remain critical of flagrant under-enforcement by the EU which allowed Google to devise and deploy a self-interested mechanism that led to \u2014 at the very least \u2014 years of delay during which there has been no meaningful reduction in its search marketshare.<\/p>\n As the DMA comes into application next year, the Commission will be taking on an expanded enforcement role for competition rules that absolutely demands a contrastingly pro-active approach \u2014 so the change of gear that will be required is huge. And there are already concerns that the EU\u2019s executive will fumble the responsibility of effectively policing Big Tech, leaving consumer and businesses to continue to suffer from tipped digital markets.<\/p>\n The Commission was contacted for a response to the CSS\u2019 letter \u2014 and to their call for an end to Google\u2019s Shopping Units \u2014 but at press time it had not provided any comment.<\/p>\n Asked for its response to the letter, a Google spokeswoman pointed us back to an earlier blog post, from March 2022, in which it claims Shopping Ads \u201csupport jobs and business growth in Europe\u201d \u2014 while enabling shoppers to \u201cquickly and easily find your merchants\u2019 online inventory\u201d, as it tells it.<\/p>\n \u201cPeople find these results helpful and traffic to these ads has continuously increased over time (in 2021, consumers clicked on 30% more shopping ads from CSSs than in 2020). And almost all CSSs have increased the number of merchants they work with or increased their activity with existing merchants,\u201d Google further claimed in the blog post, adding that the number of CSS businesses advertising on Google grew by more than 20% in 2021.<\/span><\/p>\n \u201cIn total, there were more than 350 active Comparison Shopping Services groups in Europe who advertise on shopping ads at the end of 2021. Together, they operate more than 800 CSS websites across multiple countries in Europe, creating new business opportunities and job growth,\u201d it also wrote.\u00a0<\/span><\/p>\n In their letter to the Commission, the CSS references the General Court\u2019s judgment from last year \u2014 which they argue \u201cclarified that equal treatment within search results pages is more than equal treatment within any element of a page such as Shopping Units\u201d. <\/span><\/p>\n \u201cThe General Court listed several factors that Google needs to fulfil to treat rivals equally. Inter alia, it found that Shopping Units constitute a Google CSS in themselves that directly compete with rival CSSs and that the ability for CSSs to \u2018participate\u2019 in such units by bidding for ads within them entails no equal treatment. Google has not changed this mechanism after the decision and therefore does not fulfil the Court\u2019s require,\u201d they explain.<\/span><\/p>\n \u201cThe General Court also shuttered the only argument that we have ever heard in favour of the mechanism Google chose to adopt, namely that by now over 90% of the Shopping Units displayed contain at least one product ad (offer) that was served by a rival service. The Court clarified that \u2018there is nothing in the contested decision to suggest that the Commission, ultimately, indirectly approved the method of integrating ads from competing [CSSs] in the Shopping Units\u2019. The Court itself rejected the mechanism that Google still uses today because to appear in Shopping Units requires rivals \u2018to become customers of Google\u2019s comparison shopping service and stop being its direct competitors\u2019.\u201d<\/span><\/p>\n The letter also highlights how much money Google generates from Shopping Units.<\/p>\n<\/div>\n \u201cWhile useless for rivals, Google\u2019s \u2018compliance mechanism\u2019 is highly profitable for Google. \u2018Rival ads\u2019 were the biggest driver for tripling Google\u2019s search advertising revenues from USD 89 billion in 2016 to USD 257 billion in year 2021. Consumers had to pay the price: Studies repeatedly found that Shopping Units recommend more expensive products than genuine CSSs would, causing overpayments in the billions,\u201d they argue.<\/span><\/p>\n \u201cThis is thanks, not despite, the \u2018compliance mechanism\u2019. That the Turkish and the South African competition authorities denounced Google\u2019s chosen \u2018compliance mechanism\u2019 as ineffective and counter-productive, came as no surprise but confirms our position.\u201d<\/span><\/p>\n The letter also rebuts Google\u2019s suggestion of \u201calleged advantages of Shopping Units for consumers or merchants\u201d and points out that the \u201cper-se ban in Art. 6(5) DMA of any \u2019embedding\u2019 of a separate service, such as a CSS, within search results pages, leaves no room for any justification\u201d (i.e. based on such claimed advantages).<\/p>\n They also note the General Court\u2019s scepticism that Google\u2019s conduct could generate \u201cefficiency gains by improving the user experience\u201d \u2014 as well as highlighting its view that \u201cthose efficiency gains, assuming they exist, do not appear in any way to be likely to counteract the significant actual or potential anticompetitive effects generated by those practices\u201d.<\/p>\n Nor, the CSS argue, would enforcing a ban on Google\u2019s self-preferencing require a return to a basic \u201cten blue links\u201d being displayed in search results as they say \u201cGoogle has falsely claimed\u201d \u2014 suggesting it\u2019s offering a false choice between self-serving self-preferencing or an intentionally degraded search experience.<\/p>\n \u201cThere are no technical limits to ensure an equal treatment of CSSs without reducing the quality of general search results pages for consumers and merchants,\u201d they argue. \u201cAn end of Google\u2019s self-serving Shopping Units would not necessitate an end of product images and or other enriched formats that Google considers helpful for consumers, as long as Google does not use such features to provide a price and product comparison service directly within its general search results pages (thereby embedding its own CSS). Conversely, the positive reactions of consumers and merchants in countries without Shopping Units suggest that an end of such units would pave the way for more innovation and competition in the markets for comparison shopping services, which, by definition, are of high significance for consumer welfare as they promote and encourage low product prices.\u201d<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":" The European Commission is facing fresh calls to make good on its 2017 antitrust decision against Google Shopping by banning Google from displaying its own shopping comparison ads units in search results \u2014 boxes which Google populates with revenue-generating ads \u2014 as they argue the self-preferencing units constitute an ongoing competition abuse by the adtech […]<\/p>\n","protected":false},"author":1,"featured_media":1227441,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[21],"tags":[],"class_list":["post-1227439","post","type-post","status-publish","format-standard","has-post-thumbnail","category-celebrity-gossip"],"_links":{"self":[{"href":"https:\/\/www.ghanamma.com\/2022\/wp-json\/wp\/v2\/posts\/1227439","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.ghanamma.com\/2022\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.ghanamma.com\/2022\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.ghanamma.com\/2022\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.ghanamma.com\/2022\/wp-json\/wp\/v2\/comments?post=1227439"}],"version-history":[{"count":0,"href":"https:\/\/www.ghanamma.com\/2022\/wp-json\/wp\/v2\/posts\/1227439\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.ghanamma.com\/2022\/wp-json\/wp\/v2\/media?parent=1227439"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.ghanamma.com\/2022\/wp-json\/wp\/v2\/categories?post=1227439"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.ghanamma.com\/2022\/wp-json\/wp\/v2\/tags?post=1227439"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}