European antitrust chief: Google's auction-based solution for shopping results isn't working

nanoguy

TS Addict
Staff member

When Margrethe Vestager was appointed vice president of digital policy for the European Commission earlier this year, it was clear that tech giants would be in her crosshairs. Two years ago, she slapped Alphabet's Google with a $2.7 billion fine for abusing its dominance in the search industry.

Specifically, Google was punished for the fact that it favored its own shopping comparison service in its search results by placing them at or near the top of the first page. Not only that, but the EU found that in some cases, competitors were demoted so much that they barely reached the first pages while ranking criteria didn't seem to affect the position of Google's own service.

Since then, Google Shopping has been operating as an Alphabet subsidiary separate from Google, and its search results have been marked with a "by Google" label. The search giant also offered to allow its competitors to bid for the precious space at the top of the search results. However, that doesn't seem to have the expected results.

During a Web Summit conference this week, Vestager said that "we may see a show of rivals in the shopping box. We may see a pickup when it comes to clicks for merchants. But we still do not see much traffic for viable competitors when it comes to shopping comparison."

Google Shopping competitors have previously expressed their concerns that the auction has forced comparison engines to "bid away most of their profit." They view Google's pledge to operate Google Shopping separately as "just meaningless internal accounting, paid from one Google pocket to another."

Interestingly, Google is planning a similar, auction-based solution for a different antitrust case around the default search engine on Android. Alternative search providers will have to fight for inclusion along Google Search in 2020, in an auction that may prove just as controversial.

Google isn't the only big company that has been found to favor its own services in search results. Earlier this year, Apple had to adjust its App Store search algorithm after a report found that its own apps and services featured prominently in results for the most commonly searched keywords.

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Uncle Al

TS Evangelist
That's one thing I admire about the Europeans, they are not afraid to drop the hammer on some of these tech companies and they don't back down. If only the US lawmakers would do the same, we'd all be better off.
 
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