When searching on Google for products to buy, shopping results appear as sponsored links at the top of the search results page. This attracted the ire of Europe’s competition commissioner in April 2015. The commissioner claimed the search results promoted Google’s own services and advertisements and led to loss of business for conventional price comparison websites.
Google protested, saying the EU had failed to consider the rise of online retail giants, such as Amazon. In Google’s view, these websites also compete with price comparison sites. The EU made an updated claim, saying it disagreed because Amazon sometimes paid price comparison sites to be included in search results.
Today, Google published a second response to the EU. It said its search ads benefit itself, its advertisers and most importantly, its users. It claimed that removing the promotions would be detrimental to all these services, again stating the EU is wrong to exclude sites such as Amazon. It categorically denied that Google Shopping is “harming competition” on the web.
According to Google, the EU’s revised case “doesn’t fit the reality of how most people shop online.” It said that online shoppers don’t look for products in a search engine, click on a price comparison site and then proceed to the merchant’s storefront. Instead, they access the storefront directly from a variety of routes, including search engines, specialist services, social media, online ads and price comparison sites.
“While there’s no indication that the Commission ever surveyed consumers, the evidence is clear: consumers can and do click anywhere and navigate to any site they choose,” said Google. “All of these services — search engines, price comparison sites, merchant platforms and merchants — compete with each other in online shopping. That’s why online shopping is so dynamic and has grown so much in recent years.”
Google has collected data that it says confirms its viewpoint. It pointed to a recent study that found many German online shoppers visit Amazon first of all. A third of consumers go to the site first. Only 14.3 percent go to Google and just 6.7 percent to price comparison sites. A similar study in the U.S. revealed a similar thing, even more heavily favouring Amazon. 55 percent started their search on the online retailer with 28 percent heading to Google. 16 percent began on the site of an individual retailer.
With Google not willing to concede any ground and the EU still pushing a case it thinks benefits consumers, there doesn’t appear to be any end in sight for the dispute. Google could be fined up to 10 percent of its global revenue if it is found to have breached European competition laws. It is also facing anti-trust investigations over its AdSense advertising network and Android operating system. The company said it’s “confident” the cases will be decided in its favour before a court.
“We’re confident these cases will ultimately be decided based on the facts and that this analysis will show our product innovations have benefited consumers and merchants, and expanded competition,” said Google senior vice president Kent Walker. “The surest signs of dynamic competition in any market are low prices, abundant choices and constant innovation — and that’s a great description of shopping on the Internet today.”
