Google Overhauls European Search to Comply With EU Competition Rules

The changes follow a €460 million ($534 million) EU fine imposed on Google in July for favoring its own services in areas including shopping, hotels, transportation and sports, according to Reuters. The penalty was issued under the bloc’s Digital Markets Act, or DMA, which places additional competition requirements on some of the world’s largest technology platforms.

The European Commission gave Google 60 days to bring its practices into compliance or face recurring penalties that could reach as much as 5% of the company’s worldwide turnover, Reuters reported.

Under the redesigned results, specialized search and comparison services will receive more prominent placement. Reuters reported that a specialized service will appear near the top of certain searches, followed by additional services offering less information. Listings for hotels, airlines and restaurants will also appear in a carousel, but some features — including real-time pricing — will no longer be displayed there. Google’s algorithms will continue to determine rankings.

The result could alter how European consumers move from a Google search to businesses in travel, hospitality and other industries. Comparison platforms such as Expedia and Booking.com stand to gain greater visibility, while individual businesses may be represented primarily through basic information including their website, telephone number and address, according to Reuters.

Google argues that the regulatory remedy gives online intermediaries an advantage rather than simply creating more competition.

Nick Fox, Google’s senior vice president for knowledge and information, told Reuters that the company was making substantial changes to its European search product to meet DMA requirements. He said Google expects the new system to worsen the experience for European users while benefiting intermediaries at the expense of local businesses. The changes will not apply to users outside the European Union, according to his statement cited by Reuters.

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The company characterized the overhaul as an unusually significant reduction in the quality of its search service. A Google official told Reuters that the changes represented the biggest deterioration in service quality during the search engine’s 29-year history.

Google also pointed to the economic impact of earlier regulatory changes. The company said previous adjustments made to comply with the DMA resulted in a 30% decline in free, direct booking traffic sent to European businesses, Reuters reported. Google expects the latest redesign to put further pressure on that traffic.

Testing has also raised concerns inside the company about consumer reaction. Google said it tested the revised search experience with millions of European users and found substantial dissatisfaction, with some people having to enter their searches again to locate the information they wanted, according to Reuters.

The dispute is the latest chapter in a long-running confrontation between European regulators and one of the world’s dominant technology companies. Google has accumulated €10.38 billion in EU antitrust penalties over nearly two decades, Reuters reported.

The DMA is intended to constrain the market power of large technology “gatekeepers” and prevent them from using control over major digital platforms to unfairly favor their own products. For Google, those rules increasingly affect not only how its services compete behind the scenes but what European consumers see when they conduct an everyday search.

The latest overhaul illustrates the trade-offs at the center of that regulatory effort. EU authorities have sought to give competing services more opportunity to reach consumers, while Google contends that doing so requires removing features and direct connections that users and businesses have come to rely on.

Source: Reuters