Google rivals call on EU to set rules for search engine preference menus

Four search engine rivals to Google have called on European Union lawmakers to address the tech giant’s continued dominance of the market by setting rules for search engine preference menus, arguing that the tech giant’s ability to set damaging defaults is continuing to limit how easily consumers can switch to a non-Google alternatives.

In an open letter today, the non-tracking search engines DuckDuckGo and Qwant, along with tech-for-good focused Lilo and tree-planting not-for-profit Ecosia, urge the region’s lawmakers to go further to tackle platform giants’ market power.

“The DMA [Digital Markets Act] urgently needs to be adapted to prevent gatekeepers from suppressing search engine competition,” they write. “Specifically, the DMA should enshrine in law a requirement for a search engine preference menu that would effectively ban Google from acquiring default search access points of the operating systems and the browsers of gatekeepers. Moreover, the DMA should ensure that, in addition to selecting their preferred search default in initial onboarding, consumers are able to one-click switch at any time via prompts from competing search engine apps or websites. These actions would finally lead to significant implications for competition in the search engine market and ensure there is real consumer choice online.”

The Commission presented the Digital Markets Act at the end of last year — proposing a fixed set of ex ante rules for so-called Internet “gatekeepers” with the aim of ensuring that these intermediating Internet giants cannot abuse their power to crush competitors and squeeze consumers.

However the four Google search rivals say the proposed legislation doesn’t currently contain any measured that will help break the tech giant’s continued dominance of search in Europe (where it has around 93%) — hence their call for EU lawmakers to make amendments to add binding rules for search preference screens so that consumers always have an effortless ability to switch their default search engine choice, whether on mobile or desktop.

While the Commission was responsible for the original draft of the DMA, the EU’s other core institutions — the European Parliament and Member States, via the EU Council — have to agree on the details so negotiations over the exact shape of the regulation are continuing.

“We welcome the Commission’s goals with the Digital Markets Act (DMA) but the DMA fails to address the most acute barrier in search: Google’s hoarding of default positions,” the four search rivals also write. “Google would not have become the overall market gatekeeper they are today without years of locking up these defaults. If the DMA fails to address this fundamental issue, we believe the status quo will continue, leaving the root cause of this problem unchanged.”

Google has been contacted for comment on the claims.

Back in 2018, the EU’s competition commission fined Google $5BN over antitrust abuses in how it operates its Android smartphone platform.

Following that intervention the tech giant introduced a regional search preference screen that was shown on set-up of a new Android smartphone in Europe. However Google quickly implemented a sealed bids auction model that required rivals to pay it (and outbid each other) to appear in one of the available slots which competitors immediately decried it as unfair and non-transparent.

Some three years later, following another intervention by the Commission — and after absolutely no dent in Google’s search marketshare in Europe — the tech giant finally announced it would drop the auction model, replacing it with a choice screen that displays eligible search rivals without requiring a fee.

But, again, rivals quickly pointed out continuing limitations with Google’s ‘remedy’ — such as the fact it only applies to mobile devices, not to users of Google’s browser Chrome on desktop devices; and the fact that Android users are only shown the choice screen on set-up or at a factory reset, so most of the time they use a device they do not see it.

DuckDuckGo, for example, has been loudly pressing the case for a ‘truly fair’ search choice that only requires one click for consumers to switch — not the 15+ clicks it says it takes to switch default search engine on an Android device currently at any other point after initial set up (or a factory reset).

Using such dark patterns to lock in self-preferencing defaults is something that should be proscribed by EU law, the search rivals argue.

“Google-imposed limitations make it hard for consumers to adopt other search engines, despite the Commission’s antitrust decision,” they argue. “Like MEP Yon-Courtin proposed in her draft report for the Economic Affairs committee, we believe a properly-designed preference menu should be mandated more broadly.”

We’ve reached out to the Commission for comment on the call for dedicated search preference screen rules to be baked into the DMA and will update this report with any response.

Where’s the remedy?

The European Commission has — for years — shied away from imposing specific remedies on Google, despite a string of antitrust enforcements. Instead EU lawmakers have typically said it is up to Google to figure out exactly how to comply with its various orders to cease infringements in areas like product search, search ad brokering and Android.

The result of such a hands-off approach by the EU’s executive is that Google has been able to find ways to maintain its dominance of key strategic markets like search — in spite of a string of high profile antitrust enforcements in Europe.

It’s an uncomfortable record for the EU’s competition chief, Margrethe Vestager, who has carved out a reputation as the ‘iron lady’ willing to take on Big Tech — yet whose enforcements in the digital sphere haven’t actually moved the needle on platform giants’ market share. (Nor blocked Google from continued consolidation.)

However some EU Member States are starting to take a much more hands on approach to reigning in big tech’s market abuse which looks like it will have an impact.

France’s competition authority, for example, recently extracted a series of interoperability requirements from Google in a case related to self-preferencing of its adtech.

While Germany’s Federal Cartel Office started this year armed with beefed-up powers to impose ex ante remedies on digital giants that are deemed to have substantial market power. It’s now in the process of assessing whether Google — and a number of other tech giants — meet that bar. If it finds they do it looks eager to get to work setting pre-emptive rules for how they can operate in Germany.

Outside the EU, the UK is also reforming domestic competition rules to clip Big Tech’s wings. It’s in the process of shaping an ex ante regime for digital giants with what it describes as “strategic market status” — that, unlike the Commission’s approach with the DMA, won’t be one-sized fits all.

Instead the UK has said it wants to tailor rules to the specific business — which would give its regulators more leeway to, for example, impose a search preference menu remedy on a firm like Google if they decide such a step is necessary.

The Commission’s centralized single set of rules for Big Tech does, therefore, look like it could end up being a weak tool in the face of extremely well resourced ‘innovators’ who have years of experience building and iterating services that are designed to eliminate friction and topple barriers to greater scale.

So the EU’s executive risks being caught flat-footed on the issue of tech antitrust at a time when lawmakers all around the world are fired up and active on the issue — from China to the US.

It’s therefore interesting to note how, in the wake of a very bad week for (another tech giant:) Facebook, including Congressional testimony by the latest tech whistleblower, Francis Haugen, EU commissioners were falling over themselves to tweet about their “urgency” to tackle Big Tech…

Antitrust chief Vestager also tweeted in the wake of the global Facebook outage — which was also an Instagram and a WhatsApp outage, since all three social services run on the same infrastructure, all being owned by Facebook — with the EU’s EVP saying the episode demonstrated the need for “alternatives and choices in the tech market”.

Given that headline anti-consolidation message, EU citizens might be forgiven for asking why Vestager’s department hasn’t blocked a single tech acquisition — including Google’s recent gobbling of health tech company Fitbit? How exactly does Vestager propose to support startups and alternatives in gaining the necessary scale to challenge platform giants?

Sadly her tweet didn’t contain any solutions — so the search for a remedy goes on.

It also remains to be seen where the Commission’s next Google antitrust investigation will go.

This summer the bloc’s executive confirmed it was looking into the tech giant’s adtech — lagging antitrust interventions already been taken elsewhere in the region, including in the UK and France.

As for Google, the tech giant has been busy fighting the Commission’s existing antitrust enforcements against it.

Last week its lawyers were up in court for their appeal against the Commission’s $5BN Android antitrust fine — claiming that penalty was based on flawed calculations, was not “appropriate” and that it had not had any anti-competitive intent.

 

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