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So, after first presenting some very general ideas for DMA compliance in December 2022, Google has now finally begun testing changes on general search pages (supposedly) to comply with the ban on self-preferencing. Google previewed the changes at a workshop in Brussels and then announced them publicly via a Blog post from its chief competition lawyer in Europe.
The first striking thing is that these changes are being tested with only 4 weeks to go until full compliance is required under the DMA. We know that Google can move quickly if it chooses to, but if it takes 13 months to move from initial ideas to testing, how long will it take to launch new solutions if (or perhaps when) the further changes are needed to achieve compliance? It would appear from the timing that Google is not allowing for any further changes in its compliance timetable, regardless of the feedback it receives.
The second, and more important, issue is that these changes do not appear to comply with either the spirit or the wording of the DMA. Where Google includes its own services in results pages (whether those services are embedded or linked to) it has to treat rivals no less favourably. The fact that Google is making changes at all suggests that it knows that it is currently embedding its own comparison-shopping service on the page in the form of Product Listing Ads. After all, if Product Listing Ads is not a CSS, it would not trigger an Article 6(5) requirement and no changes would be necessary. On that basis, Google then needs to treat rivals no less favourably than PLA – and yet rival services (when they do appear) show up either as intermediaries within Google’s on-SERP CSS, or only as inferior links, with no ability to provide the same service as Google’s CSS on the page. This leaves Google as the default CSS and fails to provide the fair competition and user choice that the DMA is intended to drive.
Finally, there is Google’s messaging of the changes. On the face of it, Google’s blog post on ‘An update on our preparation for the DMA’ began innocuously enough with a list of the changes and tests it will be undertaking. No alarm bells…until this clanger at the end: “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”. This rhetoric is all too familiar from the US when Google and others felt their business models would be threatened if a raft of antitrust Bills were passed. It ignores the central issue here though – Google’s current business model is based on reducing consumer choice, giving its own services preferential status on the SERP, and excluding rivals. The default embedding of Google’s own services means that consumer choice of services is reduced, innovation by rivals and Google is disincentivised and retailers pay more for advertising. The ‘difficult trade-off’ Google is facing is simply the trade-off between continuing its current business model or allowing genuine competition and consumer choice between Google’s services and those of rivals. The DMA may involve Google generating less profit and having to compete fairly with rivals – it is false to say that it requires a negative outcome for consumers.
To end, as the Google blog correctly states, it is testing and rolling out changes, which are being monitored by the European Commission. The timescales and impacts remain unclear, but there are clear issues with the proposals in terms of (a) their compliance with the DMA and (b) their ability to deliver benefits for consumers that are available through that compliance. We continue to engage to help find a solution that drives better outcomes for consumers through compliance with the law – for us, the fight for competition and choice continues and we’re here for the long haul.