DMA 6.5 and Google self-preferencing: allowing Google non-compliance to carry on will come at the expense of all businesses and consumers

With the recent adoption of preliminary findings by the European Commission against Alphabet, Google has argued again that the DMA “requires [them]to make more changes […] making it harder for people to find what they are looking for and reduc[ing] traffic to European businesses”. This claim of falling traffic for some businesses, which contradicts publicly-available data, has been echoed by some stakeholders (“We need [a DMA compliance solution] ensuring European hotels and restaurants have fair online visibility”; “Airline offers must remain visible and easily distinguishable”), all pushing for visibility on Google.

This narrative tries to steer observers away from the very purpose of the DMA self-preferencing ban: ensuring Google’s dominant position in Search is contestable and restoring fair competition between Google and its competitors. The DMA is clear: Google should make changes, and these changes are not requiring it to arbitrate the market. Changes should ensure that Google treats its own service equally to those of its competitors.

Currently, Google seems to present compliance with its DMA obligations as a zero-sum game, picking ‘winners and losers’. This is a false dichotomy when the reality is that Google is picking itself again and again as the winner by continuing to preference its own services to the detriment of all business users and -ultimately- consumers.

To better understand the case, let’s rewind: Google was originally just a general search engine. Its added value was to allow you to find what you were looking for on the world wide web (Internet), not on Google. Its unique selling point was to get you off its website as quickly as possible and on to the website having the information you were looking for. Google did this so well that, in a few years, it reached a dominant market position in general search across the globe. Google then decided to expand its activities to other digital markets— “vertical” downstream markets. It did so with a new and very rational objective for an advertising company: keeping its users within its ecosystem as long as possible, thereby maximising advertising exposure and related income.

For instance, Google started offering shopping comparison services in 2002, back then under the name “Froogle”. For Shopping as for all the next ventures into vertical markets (and still to this date), Google followed a simple but very effective 4-step plan:

1. Giving prime visibility to Google’s new service: A new Shopping “box” was added at the top of Google’s General Search results page—where most users start their journey on the Internet. With less space available for other price comparison sites on the Search Results Page, competitors to this new Google shopping comparison service had then only two choices: either paying AdWords to appear above this new box; Or get buried below the fold, where it’s less likely to get many clicks.
2. Offering free advertising in the Google Shopping box to retailers. While competitor comparison sites increased their ad spend to compete with the Google Shopping box,  online shopping websites could showcase their products in this highly visible Google box for free.
3. Getting most, if not all, competing shopping comparison services out of business. How to compete against a Google offering the same services for free to your clients?
4. Start charging retailers once there is little competition left from other intermediary services (as it did in 2012 for Shopping). Your clients are locked in, you can set the prices without any external competitive pressure. Time to cash in!

This is obviously an anticompetitive practice—as stated by the European Commission and confirmed by the ECJ in the landmark Google Shopping case. The DMA, by banning self-preferencing, aims to prevent the repetition of the same pattern again and again. The purpose is simple: ensuring that there is vibrant competition against Google for all those “vertical” markets: shopping, air, rail, hotel, restaurants, experiences but also jobs, maps, news, sport results and so many others.

Let’s look at how this Google playbook has been applied in the travel market.

• Hotels: based on a recent HOTREC distribution study: as a hotel meta search engine, Google went from being used by 37% of hotels in 2013 to 80% in 2023, thanks notably to the free visibility they got in the Google hotels box. Other hotel intermediaries are losing ground against Google, year after year, as also shown by the HOTREC study.
• Flights : between 2020 and 2023, Google Flights’ market share (based on traffic) rose from 11.8% to 22.2% in Germany, from 19% to 33.6% in Netherlands or from 14.4% to 23.4% in Spain (source: similarweb).

Google is slowly but steadily building its dominance in travel vertical search, by embedding its own travel services in Search. Such behaviour does not only limit competition from similar specialised services, but also works to the detriment of consumers, who would have restricted choice, and travel service providers (such as small independent hotels) who also benefit from visibility of intermediaries in online search and from competition at intermediary level.

After years of antitrust investigations and debates as well as a year and a half after the self-preferencing ban of the DMA, it is time to put an end to this anti-competitive practice. Allowing non-compliance to continue will come at the expense of everyone. There will not be winners and losers as claimed by Google. But only one winner: Google. As the leading enforcement authority under the DMA, we hope the Commission will continue on the path forged by the Preliminary Findings of non-compliance to ensure the DMA delivers the level playing field between Google and its business users as it has promised to!

This Op-Ed has been authored by:

Emmanuel Mounier, Secretary General of  eu travel tech