The European Commission is facing fresh calls to make good on its antitrust decision against Google Shopping by banning it from displaying its own shopping comparison ads units in search results, as they argue the self-preference units constitute an ongoing competition abuse.
The commission found that Google abused its dominance by giving prominent placement to its own comparison shopping service and demoting rival comparison shopping services.
Rivals have complained that there is still no level playing field for shopping comparison services trying to reach consumers via the dominant search channel.
More than 40 rival comparison shopping services, including Kelkoo, PriceRunner and idealo, had written to Margrethe Vestager, the European Commission's executive vice president, accusing Google of continued non-compliance with the EU order, according to a report yesterday.
The companies are calling for the Commission to close down the Shopping Units because they argue that they lead to higher prices and less choice for consumers.
They say that there is clear evidence that the chosen mechanism to comply with the search decision is not economically effective.
There is a case for the Commission to act against self-preferencing ahead of the EU Digital Markets Act, which will bring in an up-front ban on the practice.
Although it's not clear how quickly these designation will happen, months at least will be required.
After five years of waiting for the Commission to enforce a level playing field for shopping comparison services, the 40+CSS are tired of waiting.
EU’s new rules for Big Tech will come into force in Spring 2023, says Vestager
In November of last year, the tech giant had its appeal against the EU decision largely dismissed by the General Court which made a critical assessment of its use of Shopping Units.
Sky News alleged that in order to circumvent the EU antitrust ruling, Google offered incentives to ad agencies to create fake comparison sites filled with ads for their clients, which they could display in the Shopping Units.
PriceRunner is seeking 2.1 billion in damages for what it alleges is continued non-compliance of the Google Shopping decision.
Over the course of 13 years, our industry has been affected by confirmed abuse and non-compliance by the internet giant. The Commission needs to re-open space on general search results pages for the most relevant providers by removing the Shopping Units that allow no competition but lead to higher prices and less choice for consumers.
The General Court endorsed the Shopping decision and assisted you along the way. It is time to discuss the new legal framework. There needs to be an effective end to the most important case at the center of the calls. We came to the conclusion that the only effective solution was to remove the groups of specialized search results that allow the comparison of products and prices directly within the general results pages. The shopping units need to be moved.
The Shopping Units may be linked to rival comparison services in response to certain types of product searches, such as the below example. In order to win slots in the ad units, third parties must bid, which means that if aCSS is successful in an ad auction, it is paying Google to appear in an advertisement that it typically locates at the top of search results, above organic results.
The screengrab is from TechCrunch.
The mechanism of comparison shopping search is skewed against genuine comparison services, according to theCSS.
There ispirical data that shows that a market exit is required. Almost all of the shopping ads in Shopping Units are published by just the top 20 partners of the search engine. The top 20 partners only account for a small portion of organic search results. The reason for this is that theseCSS partners don't offer an online product comparison service themselves.
Almost all 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 for merchants. Shopping Units are considered to be a Google-ownCSS that is preferred within general search resultspages.
In their letter, theCSS suggest that players across other industries share their concerns and call for an end to the Shopping Units that are injected into search results for many types of products and services. Failure to act would only lead to more abuses of power.
Rival search engines were criticized for being self-serving when they were forced to bid in a paid Google auction to appear in a regional choice screen on their phones.
Last year, the Commission stepped in and forced the removal of the paid auction and display of rival search engines that are free for eligible participants. Despite the fact that there has been no meaningful reduction in its search marketshare, search rivals are still critical of the EU's under-enforcement of its antitrust laws.
The Commission will be taking on an expanded enforcement role for competition rules that requires a contrastingly pro-active approach, so the change of gear that will be required is huge. Consumer and businesses will suffer from tipped digital markets if the EU's executive fails to effectively policing Big Tech.
At press time, the Commission had not provided any comment, even though it was contacted for a response to the letter.
The Commission has received the letter and will respond in due course, according to a spokeswoman.
A number of technical workshops with interested stakeholders will be organised by the Commission to gauge third party views on compliance with the rules.
She said that the first of such technical workshops could take and that the view of third parties would be essential in ensuring practicable and effective compliance.
The Commission spokeswoman said that the rate of display of offers from competitors of Google makes up 75% of total inventory.
Almost all of the Shopping Unit displayed by the search engine has at least one offer from a competitor. She said that half of the clicks within Shopping Units are on offers from other companies.
When asked for its response to the letter, a spokeswoman for the company pointed us to an earlier post in which it claimed Shopping Ads supported jobs and business growth in Europe.
The traffic to these ads has increased over time and people find them helpful. The number of merchants that theCSSs work with has increased, and the number of merchants that theCSSs work with has increased as well.
There were more than 350 Comparison Shopping Services groups in Europe at the end of the year. They operate more than 800CSS websites across multiple countries in Europe, creating new business opportunities and job growth, it stated.
The General Court ruled last year that equal treatment within search results pages is more than equal treatment within any part of a page such as shopping units.
Several factors need to be fulfilled to treat rivals equally. It was found that the ability forCSSs to compete with rivalCSSs by bidding for ads within them entails no equal treatment. They say that the mechanism does not fulfill the court's require after the decision.
The only argument that we have ever heard in favor of the mechanism was that by now over 90% of the shopping units displayed contain at least one product ad that was served by a rival service. There is no suggestion in the case that the Commission approved the method of integrating ads from competingCSSs in the shopping units. The mechanism that Google still uses to appear in Shopping Units was rejected by the court because it required rivals to stop being its direct competitors.
The letter shows how much money is generated by shopping units.
The 'compliance mechanism' is highly profitable for the company. ival ads were the biggest driver for tripling the revenues of search advertising by the company. They argue that shopping units recommend more expensive products than genuineCSSs, which causes overpayments in the billions.
This is thanks, not spite. The Turkish and South African competition authorities denounced the compliance mechanism as counter-productive and ineffectual.
The letter points out that there is a per-se ban on the use of a separate service within a search results page.
The General Court does not believe that efficiency gains by improving the user experience will counteract the significant actual or potential anti.
It would not be necessary to return to a basic ten blue links being displayed in search results in order to enforce a ban on self-p referencing.
They argue that there are no technical limits to ensure an equal treatment ofCSSs without reducing the quality of general search results pages. The end of the Shopping Units would not necessitate an end of product images and other enriched formats that are helpful for consumers, as long as the end of the Shopping Units is not used to provide a price and product comparison service directly within its general search results pages. 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.
Google sued in Europe for $2.4BN in damages over Shopping antitrust case
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