Over the last couple of years, rumors have been flying around that the European Union wanted to take a closer look at Google's travel tools. For now at least, that doesn't seem to be the case.
Google may have been on the receiving end of another European fine but it looks like regulators have decided not to take closer look at its travel products – at least for the moment.
At a press conference covering the tech giant’s most recent antitrust discretion — for which Google received a a $1.69 billion (€1.49 billion) fine for abusing its dominant position in online advertising — the European Union’s competition commissioner, Margarethe Vestager, said hotel and flight search were not current areas of investigation and that her team would be concentrating on Google’s actions in two other sectors.
“These [flights and hotels] are markets that develop… and Google is also changing its behaviour in these markets and this we will take into consideration when we investigate further where we have strong complainants in the local search and in jobs,” she said.
This latest development contradicted reports in 2017, suggesting the European Commission — which serves as the EU’s executive arm — had set its sights on Google’s burgeoning flights and hotels services. This appears, at least for now, not to be the case.
Despite making billions of dollars from the online travel market in terms of advertising, Google wants a closer relationship with consumers. Over the years it has gradually developed its search and booking offering in the travel space.
As Skift said last year: “Why ever stop searching for travel on Google and turn to a hotel or online travel agency site when you can book your hotel right there without leaving Google?”
Not Over Yet
Vestager’s comments today poured cold water on any imminent investigation into Google’s travel tools but it doesn’t mean it won’t happen in the future – especially as Google continues to roll out new products and services in the area.
What’s more, the Commission’s announcement back in 2017 of its decision to fine Google $2.75 billion (€2.42 billion) for abusing its search dominance in comparison shopping left the door open for future investigations into “other specialised Google search services.”
At the time, it said the decision was “a precedent which establishes the framework for the assessment of the legality of this type of conduct. At the same time, it does not replace the need for a case-specific analysis to account for the specific characteristics of each market.”
And there are certainly those hoping that regulators decide to act.
“In spite of the Commission’s decision in 2017, Google has continued to leverage its dominant position in online search services by promoting its own vertical services at the expense of rival vertical services,” said Emmanuel Mounier, secretary general of the European Technology & Travel Services Association (ETTSA,) which counts Amadeus, Expedia and Booking.com among its members.
“As ETTSA has pointed out numerous times, this is bad news for consumers looking for flights and hotels in the travel vertical and for competition. It needs to stop.”
Following the 2017 fine, Google did make some changes to its comparison shopping service, which Vestager said showed “positive developments,” but Mounier said he wanted Google to make changes across other verticals, including travel.
“In the meantime, ETTSA continues to work with the Commission to ensure that Google ceases its abuse of dominance in travel and safeguards competition and choice for consumers,” he said.
Another Big Fine
While the Commission has so far declined to take a closer look at Google’s travel tools, it has issued the tech giant with another big fine, this time over online advertising and, in particular, its AdSense product.
The Commission said that Google imposed a number of contract restrictions on third-party websites, including those in the travel industry, which prevented rivals from placing their own search adverts on the websites.
“Google has cemented its dominance in online search adverts and shielded itself from competitive pressure by imposing anti-competitive contractual restrictions on third-party websites. This is illegal under EU antitrust rules,” said
“The misconduct lasted over 10 years and denied other companies the possibility to compete on the merits and to innovate – and consumers the benefits of competition.”
This fine relates the built-in search function of websites. When somebody searches for something, search results and search adverts appear. Google is the dominant player in the search advertising field and the Commission said it used this over time to restrict competition. It did this through gradually introducing tighter contracts on publishers.
Google stopped the practices covered in the ruling a few months after the Commission initiated its wider search case back in 2016 but the tech giant is liable for civil action action.
“We’ve always agreed that healthy, thriving markets are in everyone’s interest. We’ve already made a wide range of changes to our products to address the Commission’s concerns. Over the next few months, we’ll be making further updates to give more visibility to rivals in Europe.,” said Kent Walker, Google’s senior vice president of global affairs.
Another Show of Strength
Under Vestager, the Commission has taken Google to task in a number of areas over the last few years with Wednesday’s fine bringing the total amount to $9.4 billion (8.25 billion.)
It followed up the 2017 search fine with a $4.93 billion (€4.34 billion) fine relating to its Android service last July.
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Photo credit: Competition Commissioner Margrethe Vestager, at a press conference March 20, 2019 announcing a fine against Google. European Union