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Kudos to the European Union for ensuring that Google doesn’t wield its market power with excessive advantage in promoting its own services. The U.S. FTC’s decision to avoid taking similar actions is a regulatory blemish, although the EU agreement could put more pressure on the FTC to take another look at these issues.
Google’s travel rivals in Europe, including Expedia, Booking.com, TripAdvisor, Microsoft and Yelp, won a landmark antitrust settlement as Google has agreed to display the services of three rivals when Google displays its own services for hotels, restaurants, and presumably flights, for example.
Google’s settlement with the EU — which stands in stark contrast to the free pass that the search giant got from the U.S. Federal Trade Commission last year — is not travel-specific, and applies to the services of rivals in everything from products/shopping to hotels and restaurants.
Under the settlement, which came after complaints from numerous competitors including Expedia, TripAdvisor, Microsoft and Nokia, means that when Google promotes its own specialized services such as Google Hotel Finder or Zagat restaurant reviews, it would also have to give equal weight in search results to services from at least three rivals such as Expedia, Booking.com or TripAdvisor for hotels, or Yelp, OpenTable or PagesJaunes.fr for restaurants.
Google must display the services of the three rivals “in a way that is clearly visible to users and comparable to the way in which Google displays its own services,” the EU states. “This principle will apply not only for existing specialized search services, but also to changes in the presentation of those services and for future services.”
The agreement in Europe goes beyond organic search results and also covers advertising.
The EU says Google has agreed to “remove exclusivity agreements” with publishers regarding search advertisements, and Google will end stipulations that its search advertisers can’t run advertising campaigns on competing platforms.
One opponent of Google’s practices did not welcome the tentative agreement.
FairSearch Europe, which includes companies such as TripAdvisor, Expedia, Microsoft the the Travel Tech Association, characterized the agreement as “worse than doing nothing.”
“These proposed commitments have not been subjected to any form of consultation, although it was thanks to market testing of industry participants that the Commission had condemned two previous packages of proposed commitments as fatally flawed.
“FairSearch Europe needs to examine this proposal in detail, but our concern is that the proposed commitments lock in discrimination and raise rivals’ costs instead of solving the problem of Google’s anti-competitive practices.”
For example, the agreement calls for competitors to bid for placement for positioning similar to that of Google’s own services, requiring “participating companies to hand the vast majority of their profits to Google,” FairSearch Europe says.
The settlement between Google and the EU will be enforced by an independent monitor over the next five years.
Rivals have long complained that Google’s near-monopoly in search gave it an anticompetitive advantage in promoting its own services, including Google Flight Search, Google Hotel Finder and Zagat restaurant reviews in Google Local and Google+.
The landmark agreement importantly applies to Google’s mobile offerings, as well as desktop platforms.
Here are screenshots that the EU released with the settlement announcement, showing how Google’s display of rival services would work.