Google says its shopping search is fixed. Rivals beg to differ

(CN) — Nine years after European regulators found Google unfairly steered shoppers toward its own services, a London tribunal heard Monday that the company’s fix may have changed the packaging but not the practice.

At the opening of a major damages trial before the U.K. Competition Appeal Tribunal, comparison-shopping companies Kelkoo and Ciao argued that Google’s conduct continued long after the European Commission’s landmark 2017 antitrust decision. Google says its compliance measures ended any abuse and that any decline among rival shopping sites reflected their own shortcomings rather than unlawful conduct.

The judges must now decide whether Google’s conduct remained unlawful after 2017 and, if so, how much damage it caused rival shopping sites.

The Competition Appeal Tribunal, a specialist U.K. court that handles antitrust cases, has become a favored venue for companies seeking to challenge the market power of tech giants.

Opening for Kelkoo and Ciao, Daniel Jowell accused Google of presenting a distorted account of the online-shopping market that existed before 2008.

Google argues that comparison-shopping services, known as CSSs, were already losing relevance at the beginning of the most pertinent period. Jowell said companies such as Kelkoo and Ciao were among Europe’s largest and most successful shopping-comparison businesses and were viewed inside Google as serious competitive threats. He said Google sought to push those rivals down search rankings for commercial reasons, not simply because their services were inferior.

“Our case is that Google did not like CSSs appearing in its SERP (search engine results page) and it wanted, in principle, to demote them,” Jowell said.

Back then, online shopping often started on comparison sites rather than on Google itself. Consumers could browse products and prices from multiple retailers before deciding where to buy. Kelkoo sold to Yahoo for 475 million euros (about $543 million) in 2004, while Microsoft acquired Ciao for $486 million in 2008, figures the claimants cited to show the scale of the industry before Google’s conduct took hold.

Jowell spent much of the morning walking judges through Google’s own records.

Google now contends that consumers overwhelmingly prefer direct links to merchants and have little interest in intermediary comparison-shopping services. Jowell pointed to a series of internal Google documents from 2008 and 2009 that, he said, undermined the company’s current position. One presentation suggested that users preferred broader product-comparison pages before reaching merchants, while another concluded that “catalog results make users much happier according to nearly all of our metrics.”

Jowell also highlighted internal discussions about what Google called “shopping starts” — product searches that began on Google and generated advertising revenue. In one presentation, Google described winning those searches as a priority because losing them meant losing users and the advertising revenue that came with them. The documents, he said, showed why shopping traffic became so valuable and why comparison-shopping sites came to be seen as rivals competing for the same users.

The European Commission reached a similar conclusion in 2017, fining Google 2.42 billion euros (approximately $2.77 billion) after finding the company favored its own comparison-shopping service in search results while pushing competitors down the page.

Google responded by opening its shopping box to rival comparison-shopping services, allowing them to bid for placement alongside Google’s own service. Google says that restored competition.

The claimants say it did not. They argue the system left Google’s advantages largely intact while forcing competitors to pay for visibility they previously could have earned through search rankings.

Jowell said Google’s internal discussions showed little appetite for dismantling a business that generated substantial revenue. Referring to Google’s post-decision shopping service, he told the tribunal: “It looks like a comparison shopping service, operates like a comparison shopping service, and it obtains income from merchants operating as a comparison shopping service.”

“If it looks like a duck and it walks like a duck and it quacks like a duck, it’s probably a duck,” he said, drawing a few smiles in the courtroom.

Google rejects that characterization and is expected to spend the coming weeks presenting its own account of the market, the effectiveness of its remedy and the evolution of online shopping.

The battle over Google Shopping is set to play out over the next five weeks, with a further week in reserve, before closing submissions in July and a judgment at a later date. For Kelkoo and Ciao, the damages claim turns on a what-if: How much bigger could their businesses might have been if Google had not pushed rival shopping sites down the page.

Courthouse News reporter Eunseo Hong is based in the Netherlands.