On the 27th June, Google and its parent company Alphabet were hit with a fine by the European Commission. This fine came to the not inconsiderable sum of €2.4 billion (approx. £2.1 billion, or 21 DUP MPs). Despite the massive numbers floating around, the figure only accounted for around 2% of Google’s revenue last year.
The Commission claimed that Google has acted in an illegal manner, by providing priority placement in search results to its own search results, while rival brands were relegated to lower prominence (resulting in lowered visibility, views, and ultimately clicks).
Below is a SERP for the keyword ‘shoes’, which is searched for some 2 million times a year by google.co.uk users. As you can see, anyone who searches this term is served with products and content via the Google Shopping service, before they receive visibility on regular search results.
Antitrust official, and European Commissioner for Competition, Margarethe Vestager provided a statement along with the commission’s verdict, saying “What Google has done is illegal under EU antitrust rules. It denied other companies the chance to compete on the merits and to innovate. And most importantly, it denied European consumers a genuine choice of services and the full benefits of innovation.”
Google is likely to appeal the decision, despite regulators claiming there will be follow-up sanctions if no actions are taken within the following 90 days.
What is interesting about this case, and how it may affect Google’s operations goes beyond a measly billion or two lost in fines. The idea of Google as a service, and Google as a product are two ideas that often work against one another. On the one-hand the concept of Google Search is to serve users with the most-relevant – or ‘best’ – content. And it can be assumed by casual users that any search is beholden to this ideal.
However, in practice, as in the above ‘shoes’ example – users are not served with the best or most relevant content, they are served with the Google Shopping Service and the brands that are most willing to pay their world to the top. For the casual users, under the façade of seeing a ‘most correct’ result – they are being given answers to their questions by those who spend the most.
With a global market share of approximately 80%, it is hard to argue with Google’s monopolisation of Search. And it is hard to argue that this allows them massive influence on the way users see the digital-first world around them. If Google doesn’t want a company to be seen, it won’t appear to customers shopping on the world’s largest marketplace. This is a sentiment echoed by Vestager. “Today’s decision is a precedent, a precedent that can be used as a framework to analyse such conduct.”
Why the ramifications of this are potentially massive is because Google Shopping Services isn’t the only Google feature which uses this Google-product-first-and-then-companies-who-don’t-pay mentality to standard search queries.
The travel vertical is consistently ranked amongst the biggest search verticals, and in recent years Google has had a notable influence via the Google Flights product. By taking a popular search term such as ‘flights to New York’ (approx. 900k searches a year), it appears that Google services have much larger prominence than any organic, non-paid result. Especially in a mobile-first landscape, users are unlikely to ever see the results of a brand like Travel Supermarket, never mind the thousands of other companies who operate which the European Commission claim is ‘anti-competitive’.
So while Google Shopping is the first source of contention between Google and the European Commission’s idea of a ‘level playing field’ it’s unlikely to be the last. Finance, News, Local Search are all fields where Google is allegedly giving priority to certain brands.
And despite Google sticking to the concept that all they do is supply users with products in a quick and easy fashion, it is likely that a change is going to come.