Ep 174: How Consumers Look for Hotels, The impact of recent EU fines on Google, Possible remedies to prevent Google self-preferencing

Part 1 starts 00:13 - Google and Booking: The Symbiotic Gatekeeper Relationship in European Hotel Search

We dive into our recent  user behavior research findings about hotel searches in Europe. We recruited 100 users each  from Spain, France, and Germany, asking them to find hotels in Paris or Rome, and observed how they interacted with Google's search results.

Key findings include:

1. Dominance of Ads: A significant number of users, particularly on mobile, clicked on ads. Over 50% of mobile users engaged with ads, while many didn't scroll past them.
2. Google’s Hotel Finder: Google’s Hotel Finder gathered about 30% of all clicks, while the newly introduced "Places Sites" module (compliant with the Digital Markets Act) attracted less than 2%. This highlights Google's continued self-preferencing, as the Hotel Finder consistently outranked other options.
3. Booking.com’s Market Power: Surprisingly, Booking.com garnered a significant portion of clicks, primarily through ads, indicating that the platform's dominance extends beyond organic search results. This is particularly pronounced in Spain, where Booking.com’s share was overwhelming. Spain's antitrust authorities have fined Booking.com $450 million for abusing its monopoly.
4. Country-Specific Behavior: Users in different countries showed varying behaviors. For instance, German users engaged more with filters and tabs, affecting their interaction with the Hotel Finder while Spanish users searhttps://www.linkedin.com/in/thomas-h%C3%B6ppner-7ba59a70/ched for and used Booking.com significantly more than the Hotel finder.
5. Impact on Suppliers: The study raised concerns about the fairness of Google's results for individual hotel suppliers, as aggregators like Booking.com can outbid them in the ad arena and dominate the space. This dynamic likely leads to increased hotel prices for consumers.

The European hotel market is quite distinct, with behavior in hotel searches differing drastically from other verticals, as well as across countries. This, coupled with Google’s persistent self-preferencing, poses challenges for fair competition.

Segment Reference Articles 

Google and Booking: The Symbiotic Gatekeeper Relationship in European Hotel Search

Thomas Höppner Competition Lawyer on LinkedIn

Part 2 starts 13:38 - EU Court Upholds €2.5 Billion Fine Against Google: Antitrust Ruling Could Shape Future Regulations

In a landmark decision, the European Court of Justice upheld a €2.5 billion fine against Google for antitrust violations in its Shopping Search case. This ruling marks a significant win for regulators, setting the stage for broader action against Google's self-preferencing practices across multiple sectors.

The case, which dates back over a decade, focused on Google's practice of promoting its own shopping services at the expense of competitors. Despite Google's appeal, the court sided with regulators, reinforcing the original decision. While the fine represents a small fraction of Google’s revenue, the ruling sends a strong message about the EU's determination to hold tech giants accountable.

The key takeaway? The court highlighted that Google's use of "boxes" in search results, which showcase its own services prominently, was a major factor in the decision. This could have serious implications for other verticals like local and hotel search, where similar self-preferencing behavior is prevalent.

Moreover, the Digital Markets Act (DMA) gives the EU further tools to regulate Google’s behavior across sectors. Fines under the DMA could reach up to 20% of global revenue for repeat violations, raising the stakes significantly.

With this ruling in place, it’s clear that European regulators are prepared to push harder on Google’s dominance, not just in shopping but across the entire search ecosystem.

Segment Reference Articles: 

Court Rules Google Must Pay

Part 3 starts 17:57 -  Leveling the Playing Field: Remedies for Google’s Self-Preferencing Practices

In the ongoing conversation about Google's self-preferencing, the focus turned to potential remedies in light of mounting regulatory pressure. We discussed various solutions that could address the issues raised by Google’s dominance, particularly in light of the European Court of Justice ruling.

Key Suggestions and Insights:

1. Lighter Regulation, Not Full Control: David argued for a regulatory approach that doesn’t dictate how Google designs its search results but ensures that any module Google introduces—like the Hotel Finder or Local Pack—gives competitors and individual businesses a fair shot at competing. The goal: prevent Google from keeping traffic solely on its own properties, which heavily tilts the playing field in its favor.
2. Fair Competition for All: One solution discussed was making sure all businesses, not just aggregators like Booking.com, can fairly compete within Google’s ecosystem. This would help smaller players like local hotels get more visibility rather than being overshadowed by big brands paying for top ad spots.
3. Self-Preferencing in Local Search: Mike pointed out that Google allows individual businesses to rank in the Local Pack, but the real problem arises when aggregators dominate through ads and ranking manipulation. The team agreed that while individual businesses do benefit from Google’s local results, the overall system still favors deep-pocketed aggregators like Booking.com, leading to higher costs for consumers.
4. Cross-Continental Impact: Interestingly, the team noted that actions in Europe are likely to influence U.S. policies, especially with the ongoing antitrust lawsuits stateside. There’s a growing pressure on Google to change its practices globally, not just in Europe.

Ultimately, the team concluded that Google's self-preferencing creates an unfair advantage for itself and other monopolistic platforms. Remedies should focus on leveling the playing field, encouraging competition, and limiting Google’s ability to monetize every user interaction. As regulation heats up, Google’s dominance across industries—especially in search—faces significant challenges in the coming years.