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Google Shakes Hands with the Competition

Recently, the European Commission had Google on the agenda once again: The search engine giant’s competitors complained that Google favours the display of its own search results, especially for products, hotels and restaurants. Google tried to achieve a settlement by suggesting to display its competitors’ results more prominently in its search results. However, before this is implemented Google still needs the approval from its rivals.

In a dispute Google reached out to shake its competitors’ hands – are they going to accept the offer?

In a dispute Google reached out to shake its competitors’ hands – are they going to accept the offer?

Currently the search results on Google look like the below:

Source: European Commission

Source: European Commission

After the competitors’ complaints a judicial proceeding against Google was initiated. Effectively, Google does favour the display of its own search services without informing users about it. The search giant also uses content from competitors’ specialised third parties (for example user ratings), hence Google profits from competitors’ investments.

In April 2013, Google presented its first improvement suggestions, however they were weren’t as far-reaching as expected and needed to be looked at in more detail. Recently, Google suggested new changes which include labelling Google’s own search results. In these search results they will refer to three relevant competitors which differ in layout and design from Google’s results. Third party suppliers such as comparison sites can now prevent Google from using their data without being affected.

At the beginning of 2014 Google’s competitors were provided with the newly suggested measures in order to evaluate them. After their feedback, the European Commission will decide from when the updates to Google will be legally binding for five years. If the search giant’s suggestion is approved, the search results could look like the below:

Source: European Commission

Source: European Commission

The implications that the decision will have on online marketing are still not clear, as it depends on if the suggestions are approved and from when they will be put in place. For the search engine business it means that Google could actually strengthen its already strong position in the market. Due to integrating third parties’ content into the search results, the search engine effectively becomes a meta search. This could lead to users not visiting the search engine competitor sites, because they can find everything on Google. The AdWords ads won’t be affected by the changes, but the product listing ads (PLAs) will have less space. With the lack of space, the competition for this ad format will grow and the CPCs will increase. This is the exact reason why it is important for online retailers to advertise their products on a range of search sites and not just on Google. This will allow for getting the ads placed even if the Google auction was unsuccessful.

Search engine optimisation (SEO) won’t be affected by showing competitor results on Google, but search service competitors will be able to profit from optimising their sites as the results will be based on organic searches.

It will be interesting to see if Google’s competitors accept the offer. If so, the question remains which algorithm Google will use to display the competitors’ results. We will have to see what happens in order to react to the changes in an efficient way.



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