Will UK Government Actions Curb Google?
10 July 2020
The UK Competition and Markets Authority (CMA) have been working on a year long market study into online platforms and the digital advertising market in the UK. Last week they published their extensive Final Report and summarised their findings in their article 'New regime needed to take on tech giants'. After delving into the practices of the tech giants, the CMA have lifted the lid on anti-competitive practices and presented some major concerns. Perhaps most alarmingly, though not surprisingly "UK expenditure on digital advertising was around £14bn in 2019" and about "80% of this is earned by just 2 companies: Google and Facebook" .
Concerns about market domination in the digital advertising space have been reviewed after taking inputs from numerous organisations and a large section of the report revolves around Google's monopoly status in the field of search. As a result, the CMA is calling on the government to introduce a new pro-competition regulatory body to propose measures to tackle Google's market power "so that users can continue to benefit from innovative new services; rival businesses can compete on a level playing field and publishers do not find their revenues unduly squeezed" .
Representing one of the few truly independent search engines in the world, the CMA contacted Mojeek after they released their Interim Report last year. They asked for our feedback to sections relating to the search market and any potential anti-competitive practices by the search giants, most notably Google. Our comments and future findings by the CMA were then included in this final report.
The Power of Default
A large focus of the study was about the power that comes with being listed as the default in browsers and operating systems. This cannot be overstated, with evidence of Google "encouraging" manufacturers to priortise Google search and paying billions of dollars to browsers and operating systems so that Google search is set as default. In summary, Google reinforces their dominance through 'distribution deals', something that smaller innovative alternative search engines like Mojeek can't compete with.
As the report states, in 2019 "Google paid just under £1.2 billion for default positions in the UK alone" . The Google 2018 accounts show that they spent $12.6 billion in payments to "distribution partners" to support similar tactics globally; this formed nearly half of their so-called TAC (Traffic Acquistion Costs) at $26.7 billion . Interestingly the 2019 accounts do not disclose this sum but the overall TAC rose to $30.0 billion . To put this into perspective the UK Ministry of Defence spent £38 billion in 2019 .
There's a shared understanding by all search engines on the sheer power of being listed as a default. And as the report states there are barriers to changing search engines, such as the overall hassle and technical proficiency. Exploring the psychological significance of what being default means, the report expands on this further:
"The power of default settings is an area of behavioural economics that has been well researched and is well-evidenced across a wide range of settings, such as pension savings, medical insurance and food consumption. There is a general recognition that the presence of status quo bias means that individuals will often stick with the default choices they are presented with" .
We believe that to improve competition in search, it is essential to challenge the methods for listing search engines as default. And although we support the CMA's proposed 'Digital Markets Unit' to "restrict Google's ability to secure its place as the default search engine on mobile devices and browsers in order to introduce more choice for users" , we question whether the CMA's plans will be effective enough and instead call for an outrght ban on Google, or any tech company from using their deep cash reserves to be listed as default.
In July 2018, the EU Commission found that Google had been illegally requiring manufacturers to pre-install Google software, including the Google Search app as a condition of using Google's Play Store. In response Google announced they would create a choice screen of general search providers on all new Android phones and tablets in the European Economic Area, including the UK. However, what was created, in our opinion and that of others was far from fair .
The current Android Choice Screen options arrived at were through a rigged and blind flat rate auction process. Not to mention issues with the choice screen interface, in particular "regarding the number of choices made available, the use of descriptive text as well as their timing and frequency" . We also argue that a fair choice screen should be present on all devices, not just Android, as the issue stems further than just with Google.
Hopefully, with new powers to "introduce a 'fairness-by-design' duty on the platforms to ensure that they are making it as easy as possible for users to make meaningful choices" , this will improve these matters going forward. However, to reiterate what we expressed above with Google paying billions of dollars to be listed as default, we still question how effective this will be and call for more aggressive actions by the government.
Click and Query Data
The possibiliy of opening up Google's search index was also explored and allowing alternative search engines insights into 'click and query data'. This essentially means the queries people type into the search bar and the links they then click on. Most other alternative search engines were open to this. Mojeek however is not.
As stated in our response to the interim report, doing so would go against the fundamentals of why we are creating a search engine to begin with. By absorbing aspects of Google or Bing, this would just give them even more power and control over what information those who use search engines get to see. Instead, we call for measures which support truly independent search engines with their own indexes and algorithms.
It also clear that the CMA is concerned with data harvesting practices by Google, especially with regards to the sections on advertising. However, by ordering them to open up its click and query data to rival search engines this raises serious privacy concerns, as it is not clear how this would be possible without transfering personal data. This draws worrying comparisons to the infamous AOL search data leak when search requests were linked to personally identifiable information, of which they were then leaked to the public.
The exploitative and anti-competitves practices conducted by Google have been going on far too long. And as a result, it has lead to substantial harm for consumers and society as a whole. We welcome the CMA's intervention and plans to level the playing field, because as stated by the CMA, in its current format "weak competition in search and social media leads to reduced innovation and choice, as well as to consumers giving up more data than they would like" . But although the proposed plans are laudible, we would argue the government are at risk of being outmanouvered by Big Tech. As Damien Geradin, a lawyer who has championed antitrust action against Google, says in the FT "as it may take several years for the UK government to set up the CMA's proposed pro-competition regime, this gives ample time to Google to pursue its abusive behaviour" .
Simply put, competition cannot flourish where monopolies exist. If the government want to truly make a difference, they should be actively encouraging, with other govermements, innovation in existing and new independent search engine companies.
Online platforms and digital advertising Market study final report:
CMA Press Release 'New regime needed to take on tech giants':
Mojeek's 'Online Platforms And Digital Advertising' Interim Report Comments:
Appendix V: assessment of pro-competition interventions in general search:
 Online platforms and digital advertising Market study final report, page 9 - https://assets.publishing.service.gov.uk/media/5efc57ed3a6f4023d242ed56/Final_report_1_July_2020_.pdf#page=9
 New regime needed to take on tech giants - https://www.gov.uk/government/news/new-regime-needed-to-take-on-tech-giants
 Online platforms and digital advertising Market study final report, page 13 - https://assets.publishing.service.gov.uk/media/5efc57ed3a6f4023d242ed56/Final_report_1_July_2020_.pdf#page=13
 Alphabet Inc Accounts 2018, page 32 - https://www.sec.gov/Archives/edgar/data/1652044/000165204419000004/goog10-kq42018.htm#s3DD039FFA6A054A1BC37A3CCE214BEC4
 Alphabet Inc Accounts 2019, page 35 - https://www.sec.gov/Archives/edgar/data/1652044/000165204420000008/goog10-k2019.htm#sCB04C1FFC34658B3970EA75932802CB5
 Ministry of Defence: UK Defence in Numbers 2019 - https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/869612/20200227_CH_UK_Defence_in_Numbers_2019.pdf
 Online platforms and digital advertising Market study final report, page 104 - https://assets.publishing.service.gov.uk/media/5efc57ed3a6f4023d242ed56/Final_report_1_July_2020_.pdf#page=104
 Appendix V: assessment of pro-competition interventions in general search, page 9 - https://assets.publishing.service.gov.uk/media/5efc410fd3bf7f76928785c8/Appendix_V-_assessment_of_pro-competition_interventions_in_general_search.pdf
 UK Ducks Online Ad Probe – Financial Times - https://www.ft.com/content/f09a6b2e-42e6-408f-aa44-111489a7b262
10 July 2020