February 17, 2014
Google and the European Commission recently announced an agreement to settle the antitrust investigation European authorities were conducting regarding Google’s online search system. The settlement marks an important new phase in the continuing efforts by governments to ensure that the online search process is fair and does not mislead consumers.
European authorities alleged that Google’s dominance in the online search marketplace enabled the company to put the wide range of products and services offered by Google and its affiliated companies at a commercial advantage relative to competitors. The authorities claimed that Google could highlight advertisements for its products and services in the search results received by consumers, thus placing the goods and services of rivals at a competitive disadvantage.
In the settlement agreement, Google has reportedly agreed to modify its search results display system to provide greater prominence for goods and services offered by its competitors. Google has apparently agreed to publish advertising for three rivals each time Google search results generate advertising for its products or services.
The settlement reportedly requires that each listing for goods and services of rivals be at least as prominent as those associated with Google’s products and services. The rival businesses will be required to pay Google for these listings. Apparently, an independent entity will be established to monitor Google’s compliance with these terms.
Some of Google’s competitors are reportedly not satisfied with the terms of the settlement. They contend that the proposed process will not prevent Google from deriving unfair competitive advantage from the dominance of its online search system. Some of those competitors are reportedly considering additional legal action.
If the terms of the reported settlement are implemented, consumers in Europe will face a noticeably different online search process. That process will also be substantially different than the experience provided for Internet users in the United States and other locations outside of Europe.
This settlement seems to be part of a general trend in Europe and in other places around the world to make online search results more open and less confusing for consumers. Authorities continue to work with different systems in an effort to help consumers to understand what the online search results they receive mean.
Consumers are frequently misled, believing that online search results are neutral when in fact in many instances they are the result of paid sponsorships. In other cases, consumers believe that their search results make use of merit-based rating systems, when in fact they are controlled by sponsorship payments.
Initiatives that make online search systems more fair and transparent are always welcome. These efforts are important in order to protect the interests of consumers and to facilitate effective commercial competition.
The terms of the European settlement involving Google represent a step in the right direction. Although they will not necessarily ensure effective competition and informed consumer decision-making, they will help to make the online search process more useful for the public.