E.U. says Google Search violated competition rules in preliminary findings

Another day, another case alleging self-preferencing by Google.

European regulators charged Google parent Alphabet last week with violating the bloc’s Digital Markets Act (DMA) in preliminary findings following a yearlong investigation.

The European Commission said that “Alphabet gives its own services more prominent treatment compared to others by displaying them at the top of Google Search results or on dedicated spaces,” singling out shopping, hotel booking, transport and financial and sports results.

In a statement shared with The Current, Victoria de Posson, secretary general of the European Tech Alliance (EUTA), hailed the preliminary findings as a “crucial step toward fairer digital markets.”

The EUTA represents Europe’s top homegrown tech companies, including Booking.com, Spotify and Stripe.

The DMA aims to ensure “fair and open digital markets” by reining in “gatekeepers,” defined as large digital platforms entrenched in European consumers’ lives and businesses. Alphabet, Amazon and Meta are currently among the designated gatekeepers.

In a response, Google’s senior director for competition, Oliver Bethell, called the preliminary findings “misguided” and said that changes it already made to comply with the DMA are affecting consumers and businesses.

What this means

The preliminary findings echo the direction of the U.S. Department of Justice’s (DOJ) own antitrust action against Google’s search dominance, in which the court ruled that Google violated U.S. antitrust laws. In their proposed final judgement earlier this month, DOJ lawyers asserted that “Google always wins. American consumers and businesses suffer from Google’s conduct.”

Indeed, the European Commission’s preliminary findings are a further indication to advertisers and consumers of the consequences of Google’s dominance in search. “Alphabet’s self-preferencing harms competition, limits consumer choice and threatens the sustainability of European businesses,” said de Posson.

In a paper that is instrumental to the DOJ’s case against Google, antitrust scholar Dina Srinivasan argued that Google’s dominance resulted in advertisers paying higher fees and a breakup would result in lower prices for consumers.

This won’t come as news to some advertisers, especially those in direct competition with the likes of Google Flights and Google Shopping. During the DOJ trial, Expedia’s former COO said that the travel giant’s ad spend on Google went up tenfold over a five-year period with no increase in traffic after the search engine introduced its own flight and hotel widgets.

But even as the DOJ and E.U. regulators seem to be closing in on the search giant, the rise of AI-powered chatbots and search engines could upend internet search as we know it.

Coupled with the growing popularity of alternative search engines like TikTok, Reddit and even Pinterest, marketers could be forgiven for wondering if it’s too little, too late.

What’s next

Google Search’s case is one of six ongoing competition-related investigations by E.U. regulators against Big Tech platforms.

European advertisers will likely be closely watching the investigation examining the legality of Meta’s proposed “pay-or-consent” model in the E.U., which is due to wrap up in the coming weeks.

The proposed model lets users pay a monthly fee to access an ad-free version of Meta’s services like Facebook and Instagram, without tapping into users’ personal data. In preliminary findings last year, the European Commission called the model a “binary choice” that “fails to provide them a less personalised [sic] but equivalent version of Meta’s social networks.”