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Google avoids legal censure in US for monopolistic abuse: but is the FTC right? Here’s the inside track from the UK


Yesterday the Federal Trade Commission (FTC) announced that it would not be taking legal action against Google for monopolistic abuses provided that Google changed some of its business practices relating to mobile patents.

Interestingly, it found that Google had not skewed its search results to favour its own “vertical search” products.  That seems a strange finding to me.  I can’t imagine that the EU’s competition commission will come to the same conclusion at the end of a similar 2 year investigation as they have already signalled.

Firstly, there’s some decent anecdotal evidence, at least in the UK, that Google’s not averse to pushing the boundaries of biasing results in its favour.  Secondly, merely by building vertical search capability of its own, and promoting those capabilities in its results in a different way to all other vertical search services, there’s a real danger of consumer detriment– which is where any investigation in the EU should focus.

 

Did Google bias its UK rankings in favour of itself?

When Google made a rare acquisition in the UK, paying £37.7M for minor money comparison site BeatThatQuote.com, the UK financial comparison industry was surprised and concerned.  Most comparison sites in the UK rely heavily on Google for traffic and no-one wants to compete with Google.

Would Google, with its privileged position to distribute traffic, behave anti-competitively?  TotallyMoney.com, as it happens, doesn’t rely that heavily on Google, but we didn’t believe that Google would abuse its position.  So we were stunned in early 2011 by this brilliant piece of detective work by independent SEO Rishi Lakhani.

It’s relatively technical so here’s a summary: Lakhani observed that Google wasn’t skewing results directly to favour Beatthatquote.com but, maybe, was skewing what people searched for – which is a factor in its ranking algorithm – to make more people search for the BeatThatQuote brand alongside “car insurance” and fewer search for, say, Gocompare.com with “car insurance”.

If true (I recommend you read Lakhani’s piece for yourself), Google could be pushing BeatThatQuote up its rankings and still say with a straight face to the regulator that it wasn’t changing the rankings in favour of its own subsidiary.  Smart.  But not smart enough for Lakhani. I wonder what the FTC would have made of it?

 

What’s the problem with Google in vertical search anyway?

Google’s an amazing company, one that perhaps more than any other has made our experience of the internet work so well.  Why shouldn’t we want them to go further and deeper?  Remember, the FTC found that Google was promoting its own vertical search favourably but only in the interests of providing a better search experience.

Well, maybe.  There’s no doubt that Google is squeezing other comparison services out of the search results, at least in the UK – here’s how the results for “credit cards” look today – a prime position for a unique large format ad for Google’s own card comparison service featuring pictures of leading products that is designed to attract a disproportionate share of traffic.

 

 

But what’s wrong with that?

Isn’t this a better, less disjointed experience than going on to a 3rd party comparison site?  Perhaps more streamlined, but that’s not the same as a better. The issue here is that regardless of whether or not it’s a better experience, Google will be in a position to  push its own product anyway Most people trust Google to do its usual excellent job of returning the most relevant and most useful result in response to any query.  And that’s where there’s a problem for me.  Consumers won’t know that Google is ignoring its usual set of sophisticated signals about the best sites in the case of its own services.  And in the case of its card comparison service in the UK, for example, I’d argue it’s not deserving of special promotion.

Google’s coverage is not as good as the information available at MoneySavingExpert.com, it lacks the sophistication and credit matching capability of services from MoneySupermarket.com and, dare I say it, our own credit card comparison tool.

So consumers could potentially be misled into using a service that’s not as good as those that would have ordinarily ranked above it were it not for Google’s bias. That doesn’t feel right. It’s not satisfactory to simply “trust them” as Chairman Eric Schmidt demanded, that they’re giving advantages to their own products purely in the interests of a better search experience.

Will Becker is the MD and co-founder of Media Ingenuity, the corporate parent of TotallyMoney.com



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