Google de­cides to treat shop­ping ri­vals equally as per EU or­der

The Gulf Today - Business - - 4international -

The Euro­pean Com­mis­sion slapped $2.8 bil­lion ine on the world’s most pop­u­lar In­ter­net search en­gine in June

BRUS­SELS: Google will treat its own shop­ping ser­vice the same as ri­vals when they bid for ads at the top of a search page, the com­pany said, as it seeks to com­ply with an EU an­titrust or­der and stave off fresh fines.

The Euro­pean Com­mis­sion slapped a record euro 2.4 bil­lion ($2.8 bil­lion) fine on the world’s most pop­u­lar In­ter­net search en­gine in June and told the firm to stop favour­ing its shop­ping ser­vice.

Google, a unit of US firm Al­pha­bet, has un­til Septem­ber 28 to halt this anti-com­pet­i­tive prac­tice or face a penalty up to 5 per cent of its av­er­age daily world­wide turnover.

The com­pany said com­peti­tors would be able to bid for ads in the shop­ping box via an auc­tion, con­firm­ing a Reuters re­port on Septem­ber 18.

“We’re giv­ing com­par­i­son shop­ping ser­vices the same op­por­tu­nity to show shop­ping ads from mer­chants on Google’s search re­sults pages as we give to Google Shop­ping,” spokesman Al Ver­ney said.

“Google Shop­ping will com­pete on equal terms and will op­er­ate as if it were a sep­a­rate busi­ness, par­tic­i­pat­ing in the auc­tion in the same way as ev­ery­one else,” he said. The changes will go into ef­fect on Thurs­day and ap­ply only in Europe.

The shop­ping ser­vice will op­er­ate as an in­de­pen­dent unit, with one team work­ing with com­pet­ing sites and another with mer­chants, and sub­jected to reg­u­la­tory mon­i­tor­ing.

The EU com­pe­ti­tion au­thor­ity said it had hired au­di­tor KPMG and mar­ket­ing firm Mavens to help with the task.

“It would be pre­ma­ture at this stage for the Com­mis­sion to take any def­i­nite po­si­tions on Google’s plans. As Euro­pean Com­pe­ti­tion Com­mis­sioner Vestager said, ‘this is­sue will re­main on our desks for some time’,” Com­mis­sion spokesman Ri­cardo Car­doso said.

Lobby group Fairsearch, whose mem­bers in­clude Google ri­vals such as Bri­tish shop­ping com­par­i­son site Foun­dem and US travel site Tripad­vi­sor, said it would keep a close eye on de­vel­op­ments.

“We will be watch­ing closely to see if this rem­edy ends the abuse so that con­sumers get the best prices and most rel­e­vant re­sults, and com­peti­tors have an op­por­tu­nity to in­no­vate,” its lawyer Thomas Vinje said.

About a dozen ri­vals out of an es­ti­mated 200 to 300 com­par­i­son shop­ping ser­vices in Europe have al­ready pro­vided feeds to Google. Sev­eral have crit­i­cised the pro­posal for not ad­dress­ing the reg­u­la­tory con­cerns. Deutsche Bank an­a­lysts es­ti­mate the Euro­pean prod­uct list­ing ads (PLAS) busi­ness should gen­er­ate be­tween $4 bil­lion to $5 bil­lion in 2017, rep­re­sent­ing about 5 per cent of the com­pany’s to­tal ad rev­enue.

An­a­lyst Lloyd Walm­s­ley es­ti­mated that if Google was forced to make changes, it could lop 30 per cent off of these rev­enues, or about 1-2 per cent of Al­pha­bet’s to­tal rev­enue.

Google is also un­der EU fire over its smart­phone op­er­at­ing sys­tem An­droid, as well as its Ad­sense for Search plat­form.

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