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Google Shopping accused of failing to address competition problems

Google Shopping accused of failing to address competition problems

  • Mon 28 Sep 2020 - 7:17 AM
  • 240
Study finds search giant’s move to grant rivals access to its retail platform has made little difference.
 
https://www.ft.com/content/4c6f06b9-a984-429e-b397-332a1779bd71

Google’s online shopping search engine is still disadvantaging EU rivals despite a regulatory crackdown three years ago that led the search giant to alter its practices, a new study has claimed.


Less than 1 per cent of traffic through Google Shopping is currently being directed to rival comparison shopping sites such as Kelkoo and Idealo, the analysis of 10.5bn clicks, commissioned by 25 comparison shopping sites, showed.

In the three years since Google updated its policy to grant rivals “access” to its shopping platform by allowing them to bid for slots on it, following an EU penalty over alleged anti-competitive behaviour, the visibility and profitability of its competitors have halved, according to the research.

Google’s overhaul of its shopping search came in 2017 after the European Commission fined the tech giant a record €2.4bn over abuse complaints, and said it must “offer the [advertising] space on the same terms to Google Shopping and its competitors”.

However, the measures it has taken in response to the crackdown have done little to assuage regulators’ concerns.

Thomas Hoppner, a lawyer at Hausfeld advising the companies, said the study by Lademann & Associates was the first comprehensive empirical research that showed Google’s chosen solution still posed a threat to competition.

Mr Hoppner said that Google’s rivals continued to be disadvantaged despite the changes because listings within Google Shopping units — boxes which appear above its main search results — link straight to retailers’ websites, bypassing price comparison sites.

“Less than 1 per cent [of users clicking on Google Shopping boxes] will see any rival [price comparison] website — because Google’s boxes only link directly to the merchants’ websites,” he said.

Recommended Rana Foroohar Concentrated power in Big Tech harms the US He added that Google’s main search results, which are a key source of traffic, were also unaffected by the changes — meaning that overall Google’s remedy “has not improved the competitive situation at all”.

“The Commission always rejected Google’s notion that the case concerned any ‘access’ to Google’s shopping unit and insisted that it was about equal treatment within Google’s entire general search results pages.

” Google is contesting the fine and has insisted it is not against competition rules to develop a winning product.

The research, which includes data from Germany’s Idealo, the UK’s Kelkoo and Poland’s Ceneo, comes ahead of the General Court’s decision, which is expected at the end of the year at the earliest.

At a three-day hearing in Luxembourg in February, Thomas Graf, a partner at law firm Cleary Gottlieb acting on behalf of Google, said: “Competition law does not require Google to hold back innovation or compromise its quality to accommodate rivals.

” Last November Europe’s competition commissioner Margrethe Vestager told an audience Google’s overhaul was not working.

“We still do not see much traffic for viable competitors when it comes to shopping comparison,” she said.  However, Olivier Guersent, director-general of the EU’s competition unit, told a conference that officials were seeing “positive developments” after Google introduced more choice in its shopping unit. “I don’t think any authority in the world can guarantee a specific markets outcome and I don’t think we should even try to,” he said.

He also cited data showing that 83 per cent of shopping units include at least one other rival and around 47 per cent of clicks go to those.

Google said of the study: “These figures ignore the facts of the Shopping decision.

The remedy has worked successfully for three years, generating billions of clicks for more than 600 comparison shopping services, and is subject to the intensive monitoring of the EU Commission.”

 

https://www.ft.com/content/4c6f06b9-a984-429e-b397-332a1779bd





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