Google and the EU’s anti- monopoly deal: the right solution?
On Wednesday, after more than three years of negotiations, the EU’s anti-monopoly authorities announced the supposed basis for its definitive agreement with Google regarding the display of results in its specialized search solutions.
According to the agreement, Google will show the services of three competing companies along with those of its own services when providing results for a specialist search, as can be seen in the simulation provided by the company. Many aspects of this solution are remarkably similar to the deal cut with Microsoft in 2010, when it was obliged to provide users of its software with alternative navigators to its own Internet Explorer.
Google should be concerned that it now finds itself in pretty much the same place as Microsoft a couple of years ago, thus confirming the Cassandras who say that the Google of today is yesterday’s Microsoft. In reality, there are some major differences: on the one hand, mindset. While Microsoft stonewalled, earning itself the largest fine ever imposed by the EU’s competition commission, Google has taken a much more conciliatory line, and worked hard to reach agreement with Brussels.
On the other hand, this agreement imposes much stiffer conditions on Google than Microsoft’s: while the former was obliged to provide users with competitors’ products on just one occasion, when its software was being fitted, Google must now show its competitors’ results each and every time a user makes a search that comes up with results, a commitment that will have far-reaching consequences. Taking a real-world example, such as the motor industry, this would mean that the company with a 90% market share would now have to offer anybody who walked into one of its showrooms not only its own vehicles, but explain to the customer that there are other carmakers out there, and then provide the customer with the relevant contact information.
The companies that brought the anti-trust suit against Google now have a time frame within which to appeal against the EU ruling, although it is unlikely that Brussels would take much notice, given that its stated intention is to protect consumers, not Google’s competitors.
Within a couple of months, Google results pages in the EU will be different to those in the rest of the world. This would seem to be a least-worst solution, and one that pleases nobody. The only question here is whether this is a solution that will benefit consumers. A situation where one company takes advantage of its monopoly over the search engine market to push its products at the expense of its competitors is undoubtedly harmful for consumers. Forcing that company to provide information about its competitors’ products is almost anti-natural, an attempt to restore some balance to the market, creating an environment whereby consumers can access, using the search engine they clearly prefer, information about a wider range of companies.
But is it really the right solution?
In my Friday column in Spain’s leading financial daily Expansión this week, titled Monopolies and paradoxes, the core of my argument, given the limited space available, is that Google used to have a fantastic product, a search engine that we all opted to use precisely because it provided us with unfiltered results based on relevance that we considered acceptable (and superior to other search engines up until then). It has since become a search engine that is increasingly editorialized, and that aims to substitute our selection criteria with its own along the lines of “Google knows what’s best for you”.
In so doing, it has become not simply a monster that destroys other industries with its monopoly, but, as far as I am concerned, has earned a certain enmity: either I ignore the upper part of the results page by applying an ad blocker, or I use another search engine, because I don’t like the idea of finding a large part of the page covered in what I consider to be advertising, while the results I was really looking for have been shoved down to the bottom of the page. In the end, the question is one of power and responsibility. In my opinion, Google does not know how to use either its power or its responsibility. It has gone awry, and that is a great shame.
Below, the full text of the column, in English:
Monopolies and paradoxes
After three years of negotiations, Google seems finally to have reached agreement with the European Union’s anti-trust authorities that will oblige it to include among its search results information about the products of three competitors, information that is typically provided at the top of the page.
The outcome has led to comparisons with the deal reached between Brussels and Microsoft in 2010: both companies have used their dominant position to further strengthen their hold over the market, reducing consumer choice in the process.
Google’s move into new areas has been akin to that of a bull in a china shop: if it launches a hotel search engine, its competitors tremble. Trips, shopping, restaurants… as Jeff Jarvis notes in his book “What Would Google Do”, whatever you do, Google will end up doing it better than you, and what’s more, for free.
The EU’s anti-trust body is not punishing Google’s dominance of the market, simply its abuse of the market to block competition. Neither is it trying to help Google’s competitors: the move is about protecting consumers. Editorializing the search engine that gives you 90% of the market so as to showcase your products to the exclusion of the competition has made it near impossible to compete with Google, and in the process has reduced consumer choice significantly.
But above all, Google’s behavior runs contrary to the very reasons so many of us began using the search engine more than a decade ago: because it provided unfiltered results based on their relevance. The sad paradox is that Google now needs protecting… from itself.
(En español, aquí)
