The Competition Commission (CompCom) has found out that Google’s dominance and business model distorts platform competition, since small and new platforms struggle for visibility and customer acquisition.
In its recently published Online Intermediation Platforms Market Inquiry report, the competition watchdog said that in order to address this distortion, the remedial actions have focused on improving paid and organic result visibility for smaller platforms in South African.
For the organic search results, Google is supposed to introduce a new platform sites unit (or carousel) to show smaller South African platforms relevant to the search (eg, travel platforms in a travel search) free of charge, and augment organic results with a content-rich display.
The commission also goes on to mention that Google has to introduce a South African flag identifier and local platform search filter to aid consumers to easily identify and support local platforms in competition to global ones.
The CompCom says on the paid search results, Google will have to provide R180 million in advertising credits for small platforms to use in customer acquisition, along with free training to optimise advertising campaigns. It also mentions that the company has to also provide a further R150 million in training, product support and other measures for SME and black-owned online firms to offset the competitive disadvantages faced on Google Search.
The commission also says that in certain platform categories, such as shopping and travel, there is the additional distortion of Google providing services that compete with its customers for consumer attention.
It goes on to add that Google has strong incentives to capture this specialist search traffic and has the ability to do so, given that the majority of traffic originates on Google Search, where it designs the search page and algorithm.
“In this way, it can influence where and how its own shopping and travel units appear on the search page relative to competitors. Google’s shopping unit appears at the top of all search results, and its travel units at the top of organic results, with a new paid hotel unit now appearing at the top of all search results. The evidence demonstrates these units attract a large, growing share of consumer traffic, and for shopping this has been found to distort competition in the European Union,” says the report.
The new findings from the inquiry did also reveal Google to be self-preferencing of its own shopping and travel units on its search results page distorts competition.
For both regulatory compliance for Google and oversight by the commission to be in the right standing, Google is required to implement measures taken in Europe to comply with similar provisions in the Digital Markets Act to address self-preferencing.
