As was widely expected yesterday, the EU has officially come out with its “Statement of Objections” to Google practices that are at the heart of its antitrust complaint. They are almost entirely focused on the fact that Google promotes its own shopping search product at the expense of competitors. From the announcement:
- Google systematically positions and prominently displays its comparison shopping service in its general search results pages, irrespective of its merits. This conduct started in 2008.
- Google does not apply to its own comparison shopping service the system of penalties, which it applies to other comparison shopping services on the basis of defined parameters, and which can lead to the lowering of the rank in which they appear in Google’s general search results pages.
- Froogle, Google’s first comparison shopping service, did not benefit from any favourable treatment, and performed poorly.
- As a result of Google’s systematic favouring of its subsequent comparison shopping services “Google Product Search” and “Google Shopping”, both experienced higher rates of growth, to the detriment of rival comparison shopping services.
- Google’s conduct has a negative impact on consumers and innovation. It means that users do not necessarily see the most relevant comparison shopping results in response to their queries, and that incentives to innovate from rivals are lowered as they know that however good their product, they will not benefit from the same prominence as Google’s product.
This somewhat echoes the FTC’s analysis of Google’s playing with shopping search — but the FTC also noted that the end results actually seemed to be good for consumers (something the EU appears to be less concerned with). Here was the FTC’s conclusion on the same issue:
Indeed, the evidence paints a complex portrait of a company working toward an overall goal of maintaining its market share by providing the best user experience, while simultaneously engaging in tactics that resulted in harm to many vertical competitors, and likely helped to entrench Google’s monopoly power over search and search advertising. The determination that Google’s conduct is anticompetitive, and deserving of condemnation, would require an extensive balancing of these factors, a task that courts have been unwilling- in similar circumstances – to perform under Section 2. Thus, although it is a close question, Staff does not recommend that the Commission move forward on this cause of action.
In short, it is clear that Google experimented with ways to improve its own shopping search performance, but it’s hard to see how some of the EU’s complaints make that much sense. What business is required to promote it competitors?
Either way, Google is now in the somewhat awkward position of pointing out that its own vertical search products both are good enough to deserve the treatment Google gave them, yet bad enough that no one actually uses them. Thus it has put out a somewhat hilarious blog post that talks about how little people actually use Google’s vertical search products while also highlighting how many competitors there are. Here, for example, is the chart it shows for shopping sites in Germany: It’s pretty clear what point Google is trying to make there, though it seems likely that the EU Commission will quickly argue that this chart is actually unrelated to the point that it is making — that Google may be somehow “unfairly” leveraging its dominant position in general search, to push its vertical shopping search on users. The real question, is whether or not that’s harming end users in any way. That’s the part that seems tough to support. There do appear to be many other options for searching. And, personally, as someone who regularly uses Google (and other search engines) for a variety of searching needs, I can say that I never use it for product/shopping search, whether or not it promotes it in its search results, because I automatically default to other specialized sites for those kinds of searches. I’m at a loss as to how Google promoting its own shopping search does any harm to me in those situations. It’s just another competitor (and to me, not a very good one).
As we noted a few months ago, based on a tool that Yelp and TripAdvisor put together, there are arguments to be made that Google could do a better job with how it handles vertical search results, using its search algorithm to pull in results from others — but it’s difficult to see why anyone should want government bureaucrats determining how to build search engine results.