Google PLA antitrust remedy turning comparison engines into agencies

A new report from Searchmetrics examines Product Listing Ad results in the UK, France and Germany and finds more competition since January. The report says, “the number and diversity of comparison shopping services appearing in Google Shopping units has dramatically increased.”

From 1 percent to 32 percent. In 2017, the European Commission fined Google roughly $2.7 billion for alleged antitrust violations in shopping search. Following that decision, Google implemented changes to provide equal treatment for rival Comparison Shopping Services (CSS) in Europe. In that context Searchmetrics is assessing Google’s progress.

The firm conducted its analysis this fall. It compared findings to an earlier study from January 2018. The January study found that Google’s CSS competitors occupied less than 1 percent of results in the UK and about 2 percent of results in Germany (France wasn’t examined). Today, as the chart below indicates, those numbers have grown significantly to roughly a third of all PLA results across the three countries measured.

Comparison sites now acting as agencies. The report notes, however, that many of the CSS providers appearing in the ad units are not “established online price comparison sites.” These companies are effectively acting as agencies on behalf of merchants, many of whom are new market entrants. Searchmetrics observes that for these CSS “agencies,” their own product comparison pages are irrelevant because CTRs go directly to merchant sites.

This observation echoes criticism of Google by more long-established CSS players, who wrote an open letter to the European Commission about their frustration with the state the PLA remedy. They claim their predicament is getting worse and argue the PLA auction forces them to “bid away the vast majority of their profit.” They say that because clicks on PLAs go to merchants and not CSS landing pages, they have no opportunity to “derive value from the process.”

Why you should care. Searchmetrics explains that SpendMatch, a Google incentive program that provided cash back to PLA merchants, has ended. That change may contribute to further market consolidation. The company predicts that only larger CSS players — or perhaps the most efficient — will be able to compete under the new system.

“The size of the CSS will likely become a decisive factor determining how competitive an external competitor CSS is able to be,” says the Searchmetrics report. “A CSS that manages the shopping auction process for more merchants (and more budget) will be able to operate with lower margins. We will see over the course of 2019 who blinks first.”