Search Neutrality

We were surprised by Director General Guersent’s recent comments on the Google Search (Comparison Shopping) case, claiming to have seen “positive developments” in Google’s CSS Auction “remedy”.[1]

As we, and others, have demonstrated (for example, here, here, and here), Google’s CSS Auction is the polar opposite of the equal treatment remedy mandated by the EC’s June 2017 Prohibition Decision.  In fact, as we have also demonstrated (for example, here), Google’s CSS Auction is just a thinly-veiled continuation of the same abuse already identified by the Decision. Google’s CSS Auction recreates Google’s anti-competitive Shopping Units under another name and leaves Google’s anticompetitively-applied penalty algorithms in place and unaltered.

Crucially, since the February Appeal Hearing in Luxembourg, we can now add Google itself to the long list of parties that wholeheartedly agree with this damning assessment. At the Hearing, Google confirmed from the top-down what our December 2018 presentation had demonstrated from the bottom-up.

For a variety of reasons (which we will explain at a later date), it suited Google to point out that the options available to rival CSSs during the abuse were “identical to those currently available to rival comparison shopping services”[2] today, through Google’s CSS Auction. For example, on Day 1 of the Hearing, Google claimed that since 2013 “[rival CSSs] in fact could place product ads in Shopping Units based on the same conditions that apply to product ads from Google’s CSS”.  But, as Google went on to explain, this ability for rival CSSs to place ads in Shopping Units came at an existential price. As Google put it: “[rival CSSs] had two options to place product ads in Shopping Units…The first option was for [rival CSSs] to place product ads that linked to pages on their own site that had buy functionality…The second option was for the [rival CSSs] to place product ads that link to the pages of their advertising partners.”  That is, to participate in Shopping Units, rival CSSs would have had to abandon their CSS functionality to become either a merchant (with “buy functionality”) or an advertising agency (placing “ads that link to the pages of their advertising partners”).

Crucially, by Google’s own admission, these two untenable options are exactly the same untenable options that Google’s CSS Auction now provides under the guise of a “remedy”.  Indeed, this explains the recent proliferation of so-called “fake CSSs”—advertising agencies that Google has approached and financially incentivised to pose as CSSs and thereby create the illusion of a functioning remedy.[3]

This belated confession by Google should put an end to the EC’s procrastination. It is well past time for the EC to enforce its Decision and issue non-compliance proceedings against Google’s anti-competitive and brazenly non-compliant CSS Auction. This enforcement action would now be supported by (a) the overwhelming evidence from complainants and market-participants, (b) the fundamental findings of the EC’s Prohibition Decision, and (c) Google’s own explicit admissions during the Appeal Hearing that its purported “remedy” offers rival CSSs nothing that wasn’t already available under Google’s previous abusive conduct. As Google put it: “this is what Google already allowed [rival CSSs] to do before the Decision.”[4]