While last week’s €2.4bn antitrust fine on Google Shopping broke records, it won’t exactly break the bank for Google, whose parent company Alphabet reached $665 billion in market value earlier this year.
But the EU’s demand that Google stops favouring its own price-comparison shopping service in search results within the next 90 days – or face penalties of up to €10.6m a day – may have far reaching and highly damaging consequences for the internet economy that the EU antitrust regulators have failed to anticipate.
Currently Google allows only retailers to use Google Shopping but the EU’s ruling may force it to allow other price-comparison sites and aggregation services into the ad platform. In the short-term this may sound like good news for Google. After all, the more companies using the platform the greater the competition for search traffic, and the higher the CPCs it can achieve. Yet Google made a conscious decision to exclude price-comparison services from its platform, and with good reason.
Let’s take a closer look at some of the potential ramifications of the EU ruling if other price-comparison sites are indeed allowed into Google Shopping:
Deterioration of user experience
The fact is consumers like Google Shopping Ads. Product Listing Ads (PLAs) account for more than half of retail search ad clicks because they provide shoppers with far more relevant information than standard text ads, including images, price, user ratings and shipping options. This saves consumers time and effort in product research, and Google has ploughed a lot of resources into perfecting its PLA format to make it as user-friendly as possible.
PLAs reach consumers who are already well along the path to purchase, have done their basic research and are using product-specific search terms because they are…