June was a tough month for Google with the European Commission handing it a record £2.4bn slap on the wrist for being in breach of antitrust rules. In prioritising its own shopping listings above competitors’, it had all but destroyed any level of competition, creating an uncompetitive advantage for itself. Needless to say, it has appealed the decision. In reality, there are a number of reasons why it may feel hard done by.
Firstly, price comparison sites such as Kelkoo were only able to build their businesses off the back of being found in search engines. Without it, Kelkoo wouldn’t be in existence. They optimised long tail search queries by having lots of product specific pages, utilising links aggregation. This was simple traffic arbitrage and hardly the most sustainable of business models.
Secondly, Google’s essentially created a better product than its competitors, weeding out poor search results and content from their platform. Hopping between price comparison sites only to then visit reputable retailers direct due to poor results is a thing of the past thanks to Google.
It’s therefore understandable why Google feels hard done by for merely doing what any good service provider should aspire to do – perfecting its product and futureproofing its business. If your business is entirely reliant on one source of traffic, then failing shouldn’t come as a surprise.
Finally, we can’t forget Amazon. If there were to be any changes to Google’s model that resulted in the rebirth of comparison sites, the immediate beneficiary would likely be Amazon. The number of users going directly to Amazon to begin their product search is increasing – in the last 12 months alone, more than 55% of US shoppers began their product search on Amazon. Their dominance as a marketplace means that many retailers have little choice but to have a presence. This gives Amazon access to an unprecedented amount of rich, quality, data given from consumers using the site to access other brands. Their strategy as a result, could be seen as more anti-competitive than Google’s.
The evolution of Amazon’s aims points sharply towards voice assistants such as Alexa, where users are provided with a single search result for their commercial needs, the ultimate Trojan Horse into consumers’ homes. With the comparison element effectively removed altogether, the cheapest, most relevant product is what will set sellers apart. Amazon is in a prime position (excuse the pun) to exploit this opportunity by developing these basic products and household necessities itself.
It will be interesting to see how Google responds to its record fine beyond its appeal. One must conclude that, if the knives are out for Google, they must soon be out for Amazon too. This rough-and-tumble is no doubt set to be one of the biggest rumbling stories over the next few years.