A kickback stampede: Why Google’s EU comparison shopping program may carry risk
Google’s ploy to give comparison shopping service providers more market share has triggered a gold rush. Here's why contributor Andreas Reiffen doesn't think that's a good idea.
Cast your mind back to June 2017. The birds sang, the sun shone and Google received a record-breaking fine of €2.4 billion ($2.8 billion).
But why, exactly? In a verdict that provoked differing opinions, European Union (EU) regulators ruled when it came to its search results pages, Google favored its own search results over other comparison shopping services (CSS). Comparison shopping services such as Kelkoo or Shopzilla operate by aggregating online retailers’ product offers.
Originally the search engine giant limited comparison shopping services to showing text ads only. Following their complaints, however, Google made it technically possible for them to show product ads. But this changed nothing for the CSS providers, as retailers saw no benefit in an additional intermediary. Further pressure followed, culminating in the eye-raising penalty and an antitrust order that Alphabet’s subsidiary do more to even things up.
The Shopping platform is big business for Google. Top retailers pump huge amounts of money into the format, more than they do on text ads.
Faced with the risk of further penalties, including the shutdown of its Shopping service altogether, Google needed a quick response. Twelve months later, the solution looks bright for EU retailers, Google now offers discounted rates to retailers that use its new Comparison Shopping program.
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