The eCommerce Blog - by Allegro Group

In order to resolve its dispute with the European Commission (EC) over its abuses in dominant position in search, Google has proposed to use an existing commercial product, the Google Shopping box, as a basis for a settlement with the EC. The intended purpose was to give comparable presentation of rival products; note: comparable, not equal. We are seeking a non-discriminatory settlement based on equality, which will benefit Google, e-commerce businesses, and clients alike. Although we are mainly concerned with the shopping box, this issue also affects other sectors such as publishers, maps, travel, etc.

A fundamental question regarding the box is whether access to it should be paid or not. At the moment, the box is structured as a paid auction mechanism, an additional revenue stream for Google aside from the revenue coming from the normal Google Shopping product. In this mechanism, comparison shopping services, which are Google Shopping’s “rival links,” bid for a spot in the box and if they win, they are situated on the less clicked on right-hand side of the box. At the same time, Google Shopping benefits from free access to the box. As it is the freeloading child of Google, thus its parent does not charge him rent to cohabitate in the box. Think of it like this: Mr. and Mrs. Moneybags own the largest newspaper in your town and their son is opening a new restaurant which he wants to advertise in the family newspaper. As part of a settlement with a competition authority, the parents give him prime real estate on the first page of the paper for free, while other advertisements are placed on the second page or in the back with smaller ad space for which they have to pay. Where is the fairness in this scenario?

Currently, the box is diverting free traffic from the organic, or natural, search to the higher-up paid search. Considering that Google’s original abuse was against free traffic, it is unclear how the box ameliorates the situation. If the box were free for all to access, and the link placement were rotated so as to not guarantee Google the coveted left-hand side of the box, the settlement would be significantly better.

If Google insists that we continue with a paid approach, it would mean higher costs for the e-shops, thus increasing their prices and passing these costs to the consumer. If indeed the auction mechanism will continue to be used and rival companies will have to bid for space, then all actors appearing in the box, including Google Shopping, should have to pay. In this scenario, there would need to be a separation of accounts between Google and Google Shopping, so that the money that the spoiled child pays is not re-circulated into Daddy’s pockets.

We are not asking that the box be done away with. The idea of providing users with direct answers in the form of attractive pictures rather than plain search results is something we agree can be a better consumer experience. Instead of showing people long lists of blue links, it is preferable to display something fun and vivid such as pictures. We want the user to have the best experience possible, and a rich interface such as the box can achieve this goal. The main concern is that access to the box must be granted on equal terms: if rival sites pay for access, so should Google shopping; if Google shopping gets in for free, so should everyone else. It’s time to stop the spoiled child from freeloading, and ensure Google treats everyone equally.

 

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