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Google's search tweaks draw fire as EU self-preferencing ban looms

Changes to how Google displays search results in the European Union, which the tech giant is testing ahead of a ban on self-preferencing that kicks in March 7 under the ex ante competition reform, the Digital Markets Act (DMA), have drawn a furious reaction from online travel agency, eDreams Odigeo.

Google's tweaks to what it displays in response to travel-related search queries "continues to raise substantial competitive concerns within the travel retailing industry, particularly by perpetuating long-standing self-favouring practices that actively encourage consumers to remain within Google’s ecosystem", the online travel agency said today in a press release that also urges "vigilance" and "decisive action" from EU regulators whose job it will soon be to enforce the DMA on so called "gatekeepers".

Google is one of six designated DMA gatekeepers. The other five being: Amazon, Apple, ByteDance, Meta and Microsoft. All are expected to operate their online empires in line with the regulation's list of up-front 'dos and don'ts' -- with formal compliance kicking in in a little over a month's time. Failure to abide by the law could lead to fines of up to 10% of their annual turnover if the European Commission finds fault. So the stakes are high -- even for these tech giants -- with the potential for fines that could run into the billions.

Last week a coalition of travel industry firms that eDreams is also part of, which calls itself eu travel tech -- and also includes the likes of AirBnb, Booking.com and Expedia -- expressed concerns about Google's direction of travel on DMA compliance; saying that after months of talks between the search giant and industry stakeholders, which the latter had hoped would ensure the bloc's ex ante competition rules have an impact from day one, Google's early proposals have been (and we paraphrase) 'weak sauce'. (The lobby group's actual statement, attributed to secretary general Emmanuel Mounier, is the slightly more polite assertion there's "still quite some work to do".)

Also last week, a broader grouping of EU-based tech companies, looping in comparison sites, general search competitors, secure productivity tools makers, online news publishers and others -- joining forces to press for DMA action under a banner they've branded the EU Tech Alliance -- warned of what they described as a "lack of effective engagement" by gatekeepers to calls to submit draft compliance solutions well in advance of the March 2024 deadline, to ensure a proper consultation involving business users, consumers and others.

"[G]atekeepers have either failed to engage in a dialogue with third parties or have presented solutions failing short of compliance with the DMA. Businesses and consumers are largely kept in the dark as to what is going to happen after March 7, 2024," the EU Tech Alliance wrote earlier this month, urging gatekeepers to end the foot dragging and "enter into a constructive dialogue to ensure full DMA compliance" by early March.

eDream's follow-on assessment now that Google has finally shown its hand, over the past week or so, by rolling out some of the search changes it's been brewing these past months, is that it hasn't got the missive. Or, well, that Mountain View doesn't want to read the DMA writing on the wall.

Discussing its beef with Google's current search tweaks, Guillaume Teissonnière, eDreams’ general counsel, told TechCrunch: "The DMA says that the gatekeepers cannot self prefer their own services, competing with similar services of third parties. What we say is that... rich content is a new service from Google competing with our services."

What changes has Google actually made to its search results pages? There's a range of tweaks in play, currently, with the tech giant still apparently operating in test mode ahead of the formal DMA compliance deadline.

In a blog post published January 17, Google offered up this rather tortuous description of "changes to Search results" it said it's testing -- writing:

When you are searching for something like a hotel, or something to buy, we often show information to help you find what you need, like pictures and prices, as part of our results. Sometimes this can be as part of a result for a single business like a hotel or restaurant, or sometimes it can be a featured group of relevant results. Over the coming weeks in Europe, we will be expanding our testing of a number of changes to the search results page. We will introduce dedicated units that include a group of links to comparison sites from across the web, and query shortcuts at the top of the search page to help people refine their search, including by focusing results just on comparison sites. For categories like hotels, we will also start testing a dedicated space for comparison sites and direct suppliers to show more detailed individual results including images, star ratings and more. These changes will result in the removal of some features from the search page, such as the Google Flights unit.

As part of these DMA-related changes Google has removed a box-out it used to display in search results where it was promoting flight results powered by its own flight search service, Google Flights. However the changes have also included it adding new components to search results page -- such as labelled buttons (or 'chips'), which can appear directly below the search bar and enable users of its search engine to dynamically narrow their search without leaving Google's homepage.

eDreams argues these new richer features embedded in Google search results essentially mimic the functions of third party meta/vertical search engines -- and, consequently, that Google's proposed compliance with the DMA's ban on self preferencing actually represents continued self preferencing of its own services at the expense of rivals.

"Before you had this very prominent Google Flights box. It was clearly a Google Flights box... Now there's a kind of simplified version of Google Flights [appearing under the search bar]. And also, they've integrated in the [organic search results] part, rich content that is based on prices," says Teissonnière. "So, once again, this rich content -- defined on a discretionary basis by Google -- makes the search engine results page look more and more like a meta [search engine]."

"You might have some very good alternatives available elsewhere and it will not be visible," he adds, arguing: "So this is about visibility... Google is trying to stay relevant not only at the level of the general search, where they are dominant, but to use the general search results page, in reality, to offer the service of a meta [search engine] -- and giving advantages to their own results compared to ours. So this is what we think is not compliant with the DMA."

Teissonnière also points to how Google appears to be fetching data from third parties to populate certain dynamic components it may also now display next to flight search results -- such as listing flight prices and times, even if the user has only made a generic flight search query, say searching for 'cheap flights to New York' -- suggesting this could breach another DMA edict that bans gatekeepers from using third parties' data to compete with their services.

"There is a question mark [here] too -- which is they cannot use the data that we provide to Google to compete with us," he suggests, flagging an example of dynamic pricing data which Google displays in a grey-coloured box below flights information displayed in search results. "All this comes from, probably, a data feed and an API that is powered by Google Flights. So once again, you see on the [organic] search results page a lot of information that is, in reality, powered by Google Flight Search [which is fed by third parties' data]."

Another early concern relates to the ranking of Google Flights in organic search results (i.e. as a link, rather than the box-out page unit Google used to display) -- which Teissonnière suggests may be appearing higher than it used to in general search results. "We have strong concerns that what Google is doing here will in a sense, increase the relevance of Google Flights and allow them to appear at a much higher ranking in the future," he adds.

While eDreams' complaints are focused on flights, Teissonnière says the same sort of issue occurs for other types of vertical search use-cases -- such as hotels or tours/experiences -- where Google's changes mean it's also embedding richer page elements that seek to keep users engaged with its search tools, rather than clicking on a link to a dedicated price comparison, meta search or other third party platform whose business aims to cater to their needs. So the concern is one he says is shared by a range of third parties.

In its blog post of January 17, Google claimed it's been involved in a comprehensive dialogue with affected stakeholders vis-a-vis DMA-related changes -- and further suggested the process involves "difficult trade-offs", writing then: "Over the last few months we have been seeking feedback on our changes from the European Commission and from stakeholders like developers, advertisers and companies who will be affected by them. While we support many of the DMA's ambitions around consumer choice and interoperability, the new rules involve difficult trade-offs, and we're concerned that some of these rules will reduce the choices available to people and businesses in Europe."

We put Google's "trade-offs" point to eDreams' Teissonnière, along with its suggestion that compliance with the DMA could lead to reduced choice for "people and businesses in Europe" -- but he dismisses this as pure misdirection.

"The DMA is a list of do's and don'ts," he responds. "Here we say that they are not complying with the provision of the DMA. So we don't have to enter into the question of is it better for consumers or not? The DMA has made a point that a gatekeeper cannot self preference its own services competing with the rest. This is about restoring market contestability. This is about fairness... The EU regulator has decided that this type of behaviour needs to stop.

"We'll see in the future if this is reducing consumer choice or not. We believe it will not -- because, in reality, by making the services of competition more visible, you allow innovation coming from third parties. So you will increase the visibility of our services -- of all the ecosystem -- so maybe you will reduce a bit the visibility of what Google can offer to people but, in reality, by increasing the visibility of competition, you will allow competition to flourish, to innovate."

"When Google talks about 'this will reduce innovation' it's always a bit of a fake argument," he adds. "Innovation within the Google ecosystem. If you look at innovation at the level of the market then it will increase innovation because you will see innovation coming from [others]... This is the position taken by the EU authorities. We want this to stop and so... the only thing we are focused on is does it comply?"

Google was contacted for a response to the travel industry's criticisms, and to wider worries expressed by the EU Tech Alliance that it and other gatekeepers haven't offered a meaningful engagement ahead of the compliance deadline kicking in. A spokesperson sent us this statement:

The changes to the Search results page that we outlined recently are significant -- including the introduction of dedicated units for comparison services and the removal of other units such as Google Flights, which consumers find useful. We've been seeking feedback from a range of stakeholders over many months and in over a dozen stakeholder events as we try to balance the needs of different stakeholders while complying with the law. That includes not just aggregators but the direct suppliers like airlines who previously received free traffic from units like Google Flights and will be impacted by our changes.

The company also told us that when Google Flights appears in Search results its service is ranked algorithmically among the other results "based on user relevance".

On business data, Google suggested "partners" sent it this information specifically for display on Search -- which it claimed is included as part of a link to the business's website. It added that it is committed to DMA compliance and is continuing to engage with the Commission on solutions.

We also reached out to the Commission with questions about the travel search complaints, and wider concerns about gatekeeper engagement with stakeholders on compliance proposals ahead of DMA compliance day. A Commission spokesperson declined comment on "ongoing pre-compliance discussions".