There is a long lobbyist-filled journey ahead for this House committee-backed bill to cut Google Travel down to size. But it's an important step that was almost unthinkable a few years ago.
Google’s travel industry rivals may eventually get competitive relief under a series of bills approved by a U.S. House of Representative committee.
Under the American Choice and Innovation Online Act, which passed a House committee 24-20 Wednesday in the face of intense oppositional lobbying, Google, as well as Facebook and Amazon, would be barred from giving preference to their “own products, services, or lines of business over” those of competitors.
Under the threat of penalties that could amount to 15-30 percent of their U.S. revenue, the big platforms would likewise be prohibited from using non-public data generated on their platforms to support the platforms’ products or services.
Six months after the bill’s potential adoption, the U.S. Federal Trade Commission would create a bureau of digital markets to enforce the measure, under the bill’s provisions.
Although not specifically mentioned in the House measure, which would still have to go before the full House and Senate for consideration, Google would presumably have to change its practice of giving preferential treatment to Google Flights, Google Hotels, and Google Things To Do over advertisers such as United Airlines, Expedia, Tripadvisor, Marriott, and GetYourGuide, for example.
If you searched on Google for “New York hotels” today, the first “organic” element you’d see below the advertisements is a Google four-pack with a colorful map, hotel photos, star ratings and numbers of reviews. Google says this unit is organically generated, but selecting any of the four hotels in the box takes users into Google Hotels. That’s Google’s mostly paid universe of hotel advertisements.
So instead of a search result taking travelers to Expedia or HomesToGo, the travelers stays on Google to be enticed by advertisements, which are Google’s bread and butter.
Meanwhile, in the relative netherworld below the artful Google hotel box in search results are the first traditionally free listings from Booking.com, Hotels.com, and Tripadvisor.
Google would argue that Google Hotels is not a “mostly paid universe of hotel advertisements” since there are free links to hotel websites there, and the company recently added free links beneath the paid advertisements.
The legislation would seemingly ensure that Google doesn’t give its own advertising businesses that huge advantage over non-paying competitors in its search engine.
Google’s critics, who as a rule are also partners, have been calling for the U.S. government to level the competitive playing field regarding Google for years. Google has taken a huge chunk of business from Tripadvisor and Expedia, for example, and they are two of Google’s most vocal critics.
In a statement, Mark Isakowitz, Google’s vice president of government affairs and public policy, said Google is not opposed to updated regulations.
But American consumers and small businesses would be shocked at how these bills would break many of their favorite services,” Isakowitz said. “As many groups and companies have observed, the bills would require us to degrade our services and prevent us from offering important features used by hundreds of millions of Americans. This would all dramatically undermine US technology leadership, damage the way small businesses connect with consumers, and raise serious privacy and security concerns.”
He suggested that Congress should give “more thoughtful consideration” to the bills before taking further action.
Representative from Tripadvisor and Expedia didn’t immediately respond to requests for comment.
The action in the U.S. Congress comes as the European Union is readying a formal investigation into Google’s advertising technology practices.
Photo credit: Google headquarters in Mountain View, California as seen on June 5, 2013. The U.S. Congress is considering legislation to force Google to deal more fairly with competitors. Spiros Vathis / Flickr.com