Industry News

Google anti-trust lawsuit in the EU: What you need to know

After five years of investigation, a formal antitrust complaint has been filed against Google’s shopping search in EU. This isn’t the first time European Lawmakers have taken issue with Google’s dominance, but this latest filing is the first in several expected antitrust challenges to come in the next few weeks.  However, the actual impact of these legal challenges will be a long time coming, and advertisers should not expect any direct impact on volume and opportunities on Google in the EU for several years.

The European Commission’s Concerns:

In the European Commission’s official “Statement of Objections” (SO) four main concerns were outlined.

  • The assertion that Google gives itself preferred prominence, displaying their own shopping service (Product Listing Ads) on a general search results page where no other consumer shopping engine appears.
  • Google does not penalize itself. Google does not hold itself to the same system of penalties that it does other consumer shopping engines.
  • Google helps its own growth while simultaneously hurting rival engines. Over the last few years, Google Product Search and Google Shopping have experienced very high rates of growth while at the same time other consumer shopping engines have been experience significant declines.
  • The assertion that Google has a negative impact on consumers and innovation. Rival comparison engines are given lower placement behind Google results, regardless of their relevancy to a query.

Google’s Response:

Google stated that this was very disappointing news to receive, especially for their search team that had worked so hard over the last 16 years. They believe that they have very strong arguments against the case, especially on two main fronts: better services for users and increased competition.

To the first point, Google is now able to answer many queries directly, saving tremendous amounts of time and user effort. In terms of increased competition, Google points out that users can use Bing, Yahoo, Quora, DuckDuckGo, as well as a new wave of assistants like Apple’s Siri and Microsoft’s Cortana, and more specialized services like Amazon, Le Guide, and Expedia. Google goes on to say that completion online is thriving, citing graphs from ComScore MMX and Google Data showing the amount of competition in Germany, France, and the UK.

Google then points out that mobile is changing everything, with the explosion of apps taking people directly to the information that they want. Most smart phones today come with many of Google’s competitor’s apps pre-loaded (namely Amazon, Facebook, and Microsoft).

What to Expect:

iProspect believes that in the short term businesses will not need to make any adjustments. The State of Objections process can take anywhere between one and two years, depending on the back and forth. Also, there are many cases where after a company has issued a response to the original SO, the Commission modifies their claims, or even settles the case.

However, if Google and the European Commission can’t settle, then the Commission will issue an infringement decision, at which time Google will be able to file an appeal in court, which will likely take another year or two to get settled. It will probably be another 3-5 years before Google will have to make any adjustments their Product Search or Google Shopping—for context, that’s a longer time period than Google PLAs have existed as an ad format to date.

If in the end Google is required to make some changes, anyone running PLAs or on Google Shopping will need to be prepared to make adjustments. Should this eventuality occur, there have been multiple solutions proposed in the recent Search Engine Land article, some more likely to happen than others.   

  1. Include Other Shopping Engines as prominently in the PLAs - This would mean that Google’s Product Listing Ads (PLAs) would be competing against competitors such as Nextag, Shopzilla, and Amazon (CSEs) on their own site. This means that businesses will need to continue to leverage additional CSEs on Google in order to continue having optimal performance. iProspect’s Structured Data and Feeds Team and Client Service Teams are dedicated to identifying which of these engines will be the most impactful down the road. By having a dedicated group of subject matter experts working closely together, iProspect will ensure that a business is utilizing the right CSEs leveraged by Google, while at the same time making sure that the cross engine competition is delivering more revenue at optimum cost efficiency.
  2. Allow Google Shopping to be Ranked like Other Engines – Rather than including other engines in the PLA structure, it has been suggested that Google should just rank their own shopping pages the same way it ranks other pages in any other search, essentially doing away with PLAs altogether in EU. By doing this, Google Shopping would essentially just become another CSE competing for space. If that’s the case, business will need to ensure their data quality is up to par. Similar to what would be happening in the first solution, CSEs and Google will be competing for the same space, only in this instance it would be in the organic space. Ranking would likely be based on quality of product page on a CSE, as well as relevancy of the search. iProspect’s teams already optimize feeds to ensure the highest data quality, and are constantly doing testing to find the best ways to optimize for data relevancy for each engine, language, and country.   
  3. Change the Algorithm – Rather than doing away with PLAs, Google could just change their algorithm so that other CSEs have higher rankings in the organic search results. By doing this, CSEs would be getting the exposure that they desire. Similar to the previous solution, this one would require the best data quality possible in order to have the best ranking possible. iProspect would again already be prepared for this, as the Structured Data and Feeds Team ensures that all feeds are of the highest quality, allowing clients to have the best performance possible.

The European Commission has submitted a Statement of Objections against Google, outlining four main concerns about Google Shopping.  Google has released an internal response stating that they are planning on presenting their side. What do businesses need to do in the short term? Nothing, it will likely be another 3-5 years before anything actually comes of the situation. In the long term, there will be an even greater focus on the quality of the data as matching to a consumer’s query will likely come down to whoever has the highest quality data, and what content is relevant to the consumer.

iProspect is continuing to urge businesses to leverage all types of relevant data when it comes to managing shopping campaigns globally, and that will be all the more important in the years to come.

Sources:  Search Engine LandEuropean Commission Press ReleaseEuropean Commission Fact Sheet re/code – Google MemoGoogle Official Blog