Business

Consumers pay up to 67% more for products on Google Shopping

You could be paying substantially more for products if you are searching through Google Shopping.

Consumer Watchdog issued a report today that said Google’s “search monopoly” allows the company to charge higher prices on its shopping search engine. The organization’s tests found that consumers would have paid more for eight out of 14 items if they’d used Google Shopping rather than a competing Comparison Shopping Engine (CSE).

“Google’s abuse of its monopoly position in search has not only harmed competitors, but has cost consumers money,” the report said. “Google is able to increase its revenue and cause higher prices for consumers because of its monopoly position in search and the way it favors its own services over those of its rivals in search results.”

Google Product Search initially returned results based on the best price for consumers. It was monetized through AdWords advertising, like other Google services.

Consumer Watchdog cited a 2004 statement from Google (the year it went public) that opposed charging merchants to be listed.

“Because we do not charge merchants for inclusion in [Google Product Search], our users can browse product categories or conduct product searches with confidence that the results we provide are relevant and unbiased.”

However in May 2012, Google turned Product Search into a wholly commercial initiative called Google Shopping. Google Shopping is a paid-only model where merchants have to pay to list their products and the results are influenced by the amount they pay.

The search giant attracted some flak for this at the time, mainly from Microsoft, which launched a “Scroogled” campaign in an effort to undercut Google’s credibility.

“Can you spot the ads in the Google Shopping search results? It’s easy: They are all ads,” Microsoft said in the campaign video.

Consumer Watchdog said that since merchants and retailers have to pay to have their products featured on Google Shopping, they have to raise their prices to consumers to cover the added cost.

Another concern is anti-trust, both with shopping and in other areas of Google’s business.

The European Commission spent three years investigating anti-trust concerns surrounding Google after rival companies such as Microsoft, smaller European competitors, and consumer rights groups like the European Consumer Organization (BEUC) accused Google of abusing its position in the search market.

Consumer Watchdog cited its study from 2010, which looked at “How Google is squeezing out competitors and muscling into new markets.”

It analyzed Internet traffic data from more than 100 popular websites that used to benefit from Google but are now struggling in competition.

“The ultimate significance of these developments is that they spell a rapid decline in choice for consumers,” the study said.

Seeking dominance for your own products and edging out the competition is business, plain and simple. Google builds great products. Microsoft can complain about Google’s unfair tactics all it wants, the reality is that Bing product search is pretty bad.

However over the past couple of years, Google has moved closer and closer to the line between market dominance and an unfair monopoly.

The company has long been viewed as the gatekeeper of the Internet, and concerns that we aren’t seeing the most organic and relevant results are legitimate. This particular report from Consumer Watchdog focuses on our wallets, because it is one way to make consumers viscerally understand why a Google monopoly is bad.

Consumer Watchdog conducted the test by entering 14 general product queries in the Google search bar and comparing those prices to results for the exact same item on Shopzilla, Pricegrabber, and Nextag.

The organization also suggested that to “remedy the damage” that has already been done, competing services should be listed ahead of Google services in search results for the next five years.

Google has not yet responded to request for comment.

More information:

Google's innovative search technologies connect millions of people around the world with information every day. Founded in 1998 by Stanford Ph.D. students Larry Page and Sergey Brin, Google today is a top web property in all major glob... read more »

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