The Google Commitments (hopefully that’s not a band name) are out, so rather than just assume they will be ineffectual, as I did last time around, I guess I need to look at them and make some predictions.
But first, let me give a mangled explanation of EC procedure to set the stage. Or maybe just a brief note about where we stand. As everyone knows by now, the EC, spurred by certain complainants, has been investigating various Google practices for some time. Rather than continue through that process, which would end in a set of formal findings by the Commission, Google has offered what is essentially a one-sided settlement offer and the Commission gets to decide whether to take it or not. As part of its decision making process, the Commission “market tests” the proposal by seeking public comments on the proposed commitments. Today’s announcement is the beginning of that market testing process. Or at least that’s my understanding.
In addition to the formal commitments package, the EC has also provided a helpful Q&A. In it, the Commission tells us that it has four competition concerns that this commitment package is meant to address. For now, I want to stick to just the “specialized” or “vertical” search concerns, which have been the basis of my prior posts on Google.
Okay, so with that background in place, let the Commission bashing begin!
Or maybe not. From one perspective, this package looks pretty sensible. It doesn’t radically alter Google’s product offering or destroy the consumer benefits that flow from search results that return what you are looking for. If Google thinks you’re searching for a restaurant nearby, or shopping for a particular product, or looking for a map, Google’s still allowed to serve you up results that help you out.
But from another perspective, does this settlement achieve anything? If Google derives revenue from displaying a specialized search results (or did on more than 5% of page views by EEA users in the preceding quarter), the commitments require Google to (1) label its own specialized search results, (2) display its own specialized search results in an area separate from general search results, and (3) display three rival links. (The commitments package contains helpful images that demonstrate how this works.)
As to (1) and (2), do we think consumers were confused? Don’t get me wrong, I’m sure some were (everything is confusing to someone), but I’m skeptical that the success or failure of Google either in the general search space or in any downstream specialized search product stems from users not understanding that a Google Map or a Google Shopping link is a Google product. To the extent that the concern is either that promoting its own specialized search products reinforces Google’s position in general search or hinders competitors in the downstream specialized search space, labeling seems like a remedy for a different problem.
On the other hand, (3), seems to be the only part of these commitments that really gets to the heart of the matter. Where it applies, Google will have to display links to three rival specialized search providers. But (3) does not apply where Google isn’t generating any revenue. So if Google launches a new specialized search, in which it doesn’t generate revenue from paid search results or pay-per-click (or other similar schemes), all Google has to do is label. Does that mean that Google is free to establish a monopoly in new specialized search products as long as it doesn’t charge for them? It’s not exactly clear why the question of whether revenue is generated even matters.
The commitments also lay out how Google will select the three rivals to be displayed, including by establishing pools of eligible sites to which potential competitors can apply. It sounds like a real potential source of future headaches to me, as pool members and prospective pool members start complaining about perceived inequitable treatment.
Regardless, I have to (perhaps grudgingly) admit that I think the these commitments are a decent result for the Commission. I think there is a real question as to whether specialized search is a separate product or instead a refinement of general search. And I think the trickiness of that question makes finding an adequate remedy that doesn’t destroy consumer value difficult. These commitments don’t seem like they will achieve a lot, but that may be wise given the significant potential for consumer harm of doing more.