Wednesday, 31 January 2018 09:55

Online shopping still skewed in Google's favour, say rivals Featured

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Google's rivals in the online advertising and shopping fields say the search behemoth continues to prevent others from competing fairly, despite having copped a huge fine from the European Union and been ordered to modify its ways.

The EU gave Google a deadline of 29 September to modify its strategies so as to give rivals a fair go online. The company was levied a fine of €2.4 billion (US$2.9 billion) in June last year for alleged uncompetitive behaviour.

A day before the deadline, the company said it would create a standalone unit for its shopping service and make it compulsory for the unit to bid against its rivals for ads which are displayed at the top of its search page. The unit would be part of Google, but would function separately and bid for ads using its own money.

However, this does not seem to have achieved what was promised. The Wall Street Journal  reported that rivals, like Kelkoo and Compare, were claiming that matters had hardly improved, and had in many ways gotten worse.

They were also claiming that tweaks in Google's general search algorithm had cost them, with Kelkoo's chief executive Richard Stables claiming his firm's revenue from general search had fallen by almost two-thirds in 2017.

British shopping site Foundem has a presentation here, showing why, in its opinion, the Google remedy is not a remedy at all.

searchmetrics

According to a report in September, Google had said it would make changes to an advertising panel at the top of its search screen that displays product images with links to the websites of retailers. Ten slots would be present and these would be auctioned to give rival sites a chance to buy space.

Google Shopping would also be able to bid for these slots but it will have to do so using its own revenues.

Some Google rivals told the WSJ that even with the new arrangements, they were rarely able to get a product listed on the first page of Google's search results. On the rare occasions when they did, it was far too costly to outbid Google.

Ben Kerkhof. managing director of Compare, said: “If you’re in a fight with Google, it’s a race to the bottom. We can’t bid more than we get paid, or we lose money.”

Compare is one of the companies using the new system set up in September by Google and claimed to meet the EU's demands.

Data from Searchmetrics showed that only 2% of product ads in Germany showed competing products. The search analytics firm tested out 2500 popular keywords and found Google's product ads appeared in almost all the ad spots. It studied three markets – the UK, France and Germany. (Whitepaper)

Apart from the fine levied for its alleged anti-competitive practices in online shopping, Google also faces EU investigations over its Android mobile operating system and its AdSense programme. Both probes are likely to result in big fines, reports say.

In July last year, Google was told it could also face a fine over how it pays and limits mobile phone providers who use its Android mobile operating system and app store.

A third investigation, into Google's Adsense advertising service, may also bring a fine; the EU is said to have made a preliminary determination that Google has abused its dominant position.

Google can be fined up to 5% of the worldwide daily revenue of its parent company Alphabet if it is found that the remedies it has put in place do not yield the desired result. The first progress report on the new system was submitted to the EU by Google on Monday.

Graphic: courtesy Searchmetrics


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Sam Varghese

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Sam Varghese has been writing for iTWire since 2006, a year after the site came into existence. For nearly a decade thereafter, he wrote mostly about free and open source software, based on his own use of this genre of software. Since May 2016, he has been writing across many areas of technology. He has been a journalist for nearly 40 years in India (Indian Express and Deccan Herald), the UAE (Khaleej Times) and Australia (Daily Commercial News (now defunct) and The Age). His personal blog is titled Irregular Expression.

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