Google Face Backlash For EU Proposal, Offers To Auction Web Spaces
Following a record $2.9 billion from the EU’s European Commission for anti-trust actions, Google has received backlash for its revised proposal which details the actions it intends to take to become compliant.
Reports state the revisions are also designed to prevent Google receiving further EU antitrust fines.
Google first came under fire for favouring its own shopping options within its search engine. The revisions were expected to equalise the playing field in the online comparison shopping market.
Interestingly, the search engine giant has offered to ‘auction’ off display places to rival comparison shopping websites. Sources state the offer has been widely criticised by competitors and labeled ‘inadequate’.
The proposal was submitted to the European Commission on August 29th, and Google states it allows rival companies to place a bid (in an auction-like manner) for spaces within its ‘Product Listing Ads’.
Margrethe Vestager, Competition Chief of the European Union states it’s too early to tell whether Google’s offer will be accepted:
“It is at this point in time, of course, impossible to say what will happen but obviously market reactions will be one of the things that we’ll be taking under consideration”.
The negative response and backlash could prevent Google from winning over EU antitrust regulators. Sources state Alphabet, Google’s parent company, sought feedback from 4 -5 competitors and the reaction was notably negative too.
Some sources state Google’s offer does not resolve the issues outlined by EU competition regulators. One unnamed source remarked it is “worse than the commitments”.
Foundem, the UK price comparison website which made a complaint that triggered the EU’s investigation in 2010, voiced its ill feeling towards the ‘auction’ idea:
“Unless Google is volunteering to break up its general-and specialized-search businesses, the inclusion of Google’s comparison shopping competitors into a new or existing pay-for-placement auction would simply create an additional anti-competitive barrier”.
The European Commission states it is Google’s responsibility to ensure it complies with its cease and desist order.
Spokesman Ricardo Cardoso states, “It is Google’s sole responsibility to ensure compliance with the Commission antitrust decision, and it is for Google to explain how it intends to do so”.
The search engine giant has until September 28th to cease its anti-competitive actions, otherwise, parent company Alphabet is at risk of being fined up to 5% of its daily worldwide turnover, estimated to be around $12 million per day.