As antitrust drumbeat continues to hit tech giants, Reuters from the U.S. Department of Justice reported today that the investigation of platform giants, including the Google parenting alphabet, is in full swing, and startups in the European travel sector are bringing their anti-competitive behavior allegations against the search giant.
Google According to Statcounter, it has almost complete control of the search market in Europe with a regional market share of over 90%. Unsurprisingly, industry sources say a large portion of travel bookings start as a Google search. This gives the tech giant a huge impact on the coronavirus-affected sector.
More than half a dozen travel startups in Germany agree on a joint complaint that Google is abusing its search dominance in various ways that they claim are having a negative impact on their business.
Complaints we've heard from multiple sources in the online travel space range from Google enforcing its own data standards on advertising partners to Google unfairly extracting partner data to run its own competing products cheaply.
Startups have limited details on Google's processes as the company requires advertising partners to sign NDAs in order to access its ad products. But this week, the German Handelsblatt reported on antitrust complaints from a number of local startups – including the experience booking platform GetYourGuide and the vacation rental search engine HomeToGo – accusing the tech giant of stealing content and data.
The group is considering filing an antitrust complaint against Google, according to the report.
We have also heard from several sources in the European travel sector that Google has tried to secure the rights to content and data of travel partners through contracts and service agreements.
A source who refused to be identified for fear of retaliation against their company told us: “Every travel partner has certain specifics in their business model, but overall, Google's strategy was the same: get as much data as possible from your partners and build competing products with this data. "
Not OK, Google
This is now a very familiar complaint against Google. Crowdsourced reviews platform Yelp has been accusing the tech giants of stealing content for years. More recently, Genius got creative with a digital watermark that Google caught scraping text content from its website that it pays to license (but Google doesn't). As Lily Allen may put it, it's really not okay.
The Antitrust Subcommittee hearing in Congress last month also began on the same allegation. Chairman David Cicilline barked at Google and Alphabet CEO Sundar Pichai: "Why is Google stealing content from honest companies?" Pichai evaded the question by claiming he disagreed with the characterization. But for google and parent alphabet There is no avoiding the antitrust drumbeat that is beating violently in the company's backyard.
In Europe, Google already has a number of antitrust enforcement actions in place – starting three years ago, in one case that was six years ago at this point, with a record fine for anti-competitive behavior while running a product search service called Google Shopping. EU enforcement actions against Android and AdSense followed quickly. Google is appealing all three decisions, even as it continues to expand its activities in lucrative industries such as travel.
The Commission's finding in 2017 that Google played a dominant role in the regional search market was a “special responsibility” for the legislator to avoid violating the bloc's antitrust rules in every market in which Google operates is violated. This finding puts the travel sector in perspective, although it has not yet been formally scrutinized by EU regulators (although they have opened an active investigation into Google's data collection practices announced last year).
EU regulators are also examining a number of competition concerns regarding the proposed Fitbit acquisition and delaying the merger while examining whether the deal would further solidify Google's position in the advertising market by giving it access to a wealth of Fitbit health data – Provide users that this could be used for improved personalization of the ads.
So far, the Commission has kept its powder dry when traveling.
But for around a decade, the technology giant has been developing products that compete directly for travel bookings in growth areas such as flight search. More recently, hotels, vacation rentals, and experiences have been added, putting the search tool in direct competition with an increasing number of third-party booking platforms that, in Europe at least, have no choice but to advertise on the Google platform to drive customer acquisition.
A key acquisition that underpins Google's travel destinations dates back to 2010 when ITA, a flight information provider for airlines, travel agents and online reservation systems, received $ 700 million. In the same year, the travel guide community Ruba took it on.
Google has beaten a consortium of competitors for ITA, including Microsoft, Kayak and Expedia and Travelport, which relied on its data to power its own travel products – and wanted to prevent Google from getting its hands on the data.
Even then, travel was a huge segment of search and online commerce. And it has continued to grow – nearly $ 700 billion per eMarketer worldwide in 2018 (although the coronavirus crisis is likely to affect some recent growth projections, even if the public health crisis accelerates the industry's transition to digital bookings) – all of this gives Google a huge incentive to carve an ever larger share of the cake.
This is what Google aims to do by creating ad units that meet traveler searches by offering flights, vacation rentals and travel experiences that can be searched without leaving the Google platform.
Google defends this type of extension by simply making life easier for the user by bringing the information they are looking for even closer to their search query. However, competitors claim that the choices they make are far more insidious. Simply put, they are better for Google's bottom line – and ultimately lead to less choice and innovation for consumers – is the main selling point. The main argument is that Google can only do this because it has enormous monopoly power in search, which gives it unfair access to the content and data of its travel competitors.
It is certainly noteworthy that, since acquiring ITA, Alphabet has not felt the need to acquire one of the major travel booking platforms. Instead, its market could allow it to repackage and monetize the data of competing travel platforms through a growing number of its own vertical travel search products.
One of the German consortia of travel startups with a big beef against Google is HomeToGo, based in Berlin. The vacation rental platform confirmed to theinformationsuperhighway that it had filed an antitrust complaint against the company with the European Commission.
We were told it was watched with alarm when Google rolled out a new ad unit in search results promoting a vacation rental search and booking experience – with property thumbnails, locations and prices shown on a map – right on the Google platform .
Discussion of the complaint, HomeToGo The CEO and Co-Founder, Dr. Patrick Andrae, told us: “Because of the monopoly that Google has on horizontal search, this access (for the vast majority of European internet searchers) is the only way to put you at the top of the list that theoretically you can go in any vertical. And with the power of their monopoly, they can switch on products there without investing in them first.
"Everyone else has to work a lot on SEO strategies and stuff like that to slowly climb up the ranking, but Google can just snap their fingers and say I want a product tomorrow."
The complaint is not just that Google has developed a competing vacation rental ad product, but that the competing product's packaging is so comprehensive and eye-catching that it is traffic following a standard colonizing playbook for seemingly every vertical area Google sees detected. Note that Google's display has a bigger meaning compared to organic search results (or actual paid ad links), which may show competitors as simple blue links.
"You're creating this huge, colorful super CTA (call-to-action), as we call it – that one-box thing – where everything is clickable and leads you to the Google product," said Andrae. "They explain that it's better for the user experience, but no one has ever said that the user would want a one-box from Google there." Or why shouldn't it be a One-Box from HomeToGo? Or why shouldn't it be a one-box in the kayak world of flight? Or in the Trivago hotel world? Why is only the Google product colorful, beautiful, and showing? "
Andrae argues that the design of the device is intended to give the user the impression that "Google has it all" on its platform. So why look for a vertical search engine?
He also points out that the special unit is not available to competitors. "You can't buy it," he said. “Even if you want this great type of placement, you can't buy this as a third party. Even if you want to pay money for it – I'm not talking about being in the product itself, that's a different topic – just having the same type of advertising because that's what they do – they advertise their own there Product free – and that is our complaint. "
Pay with your data
When the commission hit Google with the first record-breaking fine for its search comparison service in 2017 and found that it had systematically placed its own comparison shopping service above the competing services in organic search results, competition chief Margrethe Vestager announced that it had also received complaints about Google's behavior in the travel sector .
A Commission spokeswoman, asked about the sector's concerns now, some three years later, told us that she is "monitoring the affected markets" – but declined to comment on specific issues.
Here's another complaint: GetYourGuide, a Berlin-based travel startup that created a discovery and booking platform for travel tours and experiences, has similar concerns about Google's designs for booking travel experiences – another travel segment that the tech giant is getting into moved with your own eyes. Catching ad units while being whipped.
"They now want to create experience products themselves directly in Google search, with the aim that people can ultimately book these kinds of things on Google," said GetYourGuide CEO and co-founder Johannes Reck. "Google is now trying to pull content and data from (travel startups) to create new competitive products on Google."
For example, the startup is unhappy that an ad product that Google shows in its search results is not linked to GetYourGuide's own search page. This would be the equivalent and competing third-party product.
"Google doesn't allow us to link it to our search, just the detail page so the customer sees even less of our brand," he said. "Or in maps, for example if you go to the Eiffel Tower and press to book tickets, you won't see any of GetYourGuide, even though we are doing this."
He also rejects Google's claim against this type of complaint that it is simply "doing the right thing for the user" by not linking it to the competing platform. "We know from our data that people convert better, spend more time on our site and have higher engagement rates when we get them into our search and then deeper into the funnel," he told theinformationsuperhighway. “What Google is saying isn't that it serves the user – it serves Google and it serves their profit. Because the deeper the funnel you link, the more the user will buy or they will return to Google and look for the next product. If you link in search queries – if you don't verticalize as much – the user ends up in a different ecosystem and may not return to Google. "
“As a partner (of Google) you have only a limited choice of participation (in its advertising products). You have to give this content to Google, and then Google will try to get as many customers as possible to you, "added Reck. "I don't think there will ever be a world in which booking.com, Expedia or GetYourGuide will disappear – rather our brands will disappear."
“This is something that I think is ultimately bad for the customer and only serves Google, as in the long run the customer has no choice and no other visibility of how to vote than through Google because our brands are basically hidden behind a Google pin board. That will firmly turn Google away from its original mission … leading people to the most relevant content on the web … Now they are trying to be exactly the opposite. They are trying to be the Amazon or the alibaba of travel, keeping and containing people in their ecosystem. "
During the Antitrust Subcommittee hearing in Congress last month, Pichai alleged that Google is facing stiff competition in the travel space. Here, too, Reck claims that this is simply not true. "In Europe, more than 75% of travelers search for trips on Google, and all of those users are free," he said. “Everyone else in the travel industry pays Google top dollar … for these queries. Which competition is it referring to exactly? "
"(Pichai) then claimed they weren't using the affiliates' content – that's incorrect. If you look at Google to be in the top rankings these days, you're either paying or giving them data to help them be able to include their own products in the search. "
"It was 10 years ago that they acquired ITA software, the leading data provider for flights," added Reck. "They have just paved their way into the journey. I think their intent at this point is very clear that they are not interested in their partners – or their customers who like the choices that are offered on Google.
“They basically want to make Google the Amazon of Travel, where everyone else can be a content provider or fulfillment agent, but the consumer has no choice but to go through Google. I think that's the main intention here. You want to limit consumer choice. And they want to monopolize the space. We don't want that and we will fight that. And if this means that we have to go to the EU Commission to protect our interests and those of our customers, we will do so and are currently examining this option. "
The threat of harm to consumers due to the limited choice could manifest itself in poorer customer service, which vertical players tend to focus on – while Google, as a platform funnel, does not.
Another German travel startup – Munich-based FlixBus – was also poised to break the record with concerns about the impact Google's market power has on the industry, despite not being in the same position as its no-aggregator business.
Nevertheless, FlixBus founder and CEO Jochen Engert called on the regional legislators to act against what he described as a "systematic abuse" of market dominance by Google.
“We call on politicians in Germany and the EU to work for fair competition on the Internet now. It must be forbidden that monopolistic companies like Google abuse their market power, especially in times of crisis, and because of their dominance prevent competition for the benefit of customers, ”he said. “Google is systematically abusing its dominant position to block customers from accessing competitors, and it keeps getting away with it. It is only a matter of time before not only industry, hotel and flight bookings but also other industries and business models are permanently threatened.
"For FlixMobility (FlixBus & # 39; parent company) As an internationally positioned market leader with its own platform, technology and our unique content, the situation is more relaxed than with smaller startups or those that also aggregate content such as Google. Nevertheless, in our opinion, Google should be obliged to list and market its own products in search results on an equal footing with comparable offers. Here, the regulation must not stand by for too long, but must react irretrievably before Google controls customer access and excludes competition. "
GetYourGuides Reck expressed the hope that the German legislature could possibly offer the sector quicker relief than the European Commission, whose competition investigations usually go through the details for years.
"The federal government is actually very attentive at this point," he said. "They are currently working on new competition legislation, which they expect to introduce in the next six months. It is already being prepared – and that will also deal with exactly this kind of behavior of global, quasi-monopoly platforms that cross the demarcation line, penetrate into other areas and try to use their monopoly to create synergies in neighboring areas and crowds out of competition. "
When asked what kind of intervention he would expect from regulators against Google, Reck suggests regulating the business like a utility company – and advocates the control of data, including the openness of data, to create a level playing field.
However, he also told us that he would support more radical measures like the dissolution of Google. (But again, he says the speed of intervention is vital.)
“If you look at all the data that Google collects, whether this is customer reviews, the availability of its partners, all of the content from its partners, all of the information they have about Android, whether this is geospecific data, whether this is the case If the interest is whether this is context information, Google trains its algorithms on this data day and night, no one else can. But we have to give all the data to Google, ”he said.
"This is not a fair playing field. We need to think about how we can have a more open data architecture that obviously complies with our data protection laws, where developers can create products based on the Google platform from anywhere. As a developer on the move, this is currently the case Very difficult for me to access data from Google so I can create better products for consumers. And I think that really needs to change – Google needs to open up so we can create a more vibrant and competitive ecosystem. "
"At the national or EU level, we need an updated code of law that allows rapid intervention," added Reck, saying that competition enforcement simply cannot continue at the same pace as in the markets of the past. “It's way too fast for that. You have to take a completely new approach.
“As Google rightly pointed out, consumer prices have fallen, but falling consumer prices are the weapon of technology. By offering products for free, you can gain market share to drive out competition, which in turn leaves less choice for the customer. I think we need to think about how we think about technology and platforms in new ways. "
The Commission is currently discussing whether competition regulators need a new tool to intervene more quickly in digital markets. However, there is more than a trace of irony that compliance with processes will add another delay as regulators wonder if they need more power to intervene in digital markets to prevent a tipping rather than long-standing complaints of market abuse associated with the 800-pound gorilla of internet search – with the "special responsibility" not to trample other markets.
A Google spokeswoman who was asked to comment on the complaints about the trip starts sent us the following statement:
There are now more ways than ever to find information online and when searching for a trip, users can easily choose from a number of specialized sites including TripAdvisor, Kayak, Expedia and many others. With Google Search, we aim to deliver the most helpful and relevant results to give users around the world the best possible experience and to deliver valuable traffic to tour operators.
During the pandemic, we worked extensively with our partners in the travel industry to help them protect their businesses and work towards recovery. We introduced new tools for airlines to help them better predict consumer demand and plan their routes. For hotels, we have expanded our pay-per-stay program worldwide in order to shift the cancellation risk from our partners to us. And we've updated our search products to help consumers make informed decisions when planning future trips, further reducing the risk of cancellation.
The company did not respond to our request for a response to allegations we heard that it was attempting to secure rights to partners' content and data through contracts and service agreements.
In another sign of the growing gap between Google and its travel partners in Europe, German startups in the industry have come together to push for better conditions during the coronavirus crisis earlier this year. They accused the tech giant of being inflexible in paying for ads they offer. I run before the crisis hits. This meant they had a big hole in their balance sheets after making bulk refunds for travelers who were unable to make their planned trip. But the gorilla was not sympathetic and immediately demanded full payment.
When asked what happened after theinformationsuperhighway reported their concerns in late April, Reck said Google had been silent for a few weeks. As soon as the travel market in Germany picked up – and GetYourGuide decided that Google had to advertise again – the demand for full payment was made again.
GetYourGuide says it had no choice but to pay as it needed to be able to serve Google ads.
Reck describes the recovery package that Google offered after the payment was made as the "Google Recovery Package" because GetYourGuide spent a large amount on YouTube ads to get a small discount.
The offer would only make up for a "fraction" of GetYourGuide's original losses on Google ads during the height of the COVID-19 crisis per bar. “Obviously we didn't lose the money on YouTube. We lost the money searching where we had high intent customers, Google customers who wanted to come and shop. So for us it was (another) slap in the face, ”he added.