South Africa nails Google for ‘anti-competitive processes’ – demands big changes

The Competition Commission has found that Google Seach uses anti-competitive processes and says the tech giant has to introduce a host of changes for its operations in South Africa.

In the Online Intimidation Platforms Market Inquiry, the Competition Commission said that most search, travel and shopping journeys for goods and services start with a general search, which is the entry point for most consumers on the internet.

With 90% of all general searches on desktops, tablets and mobile devices, Google Search is a de facto monopoly, the commission said.

“Given its importance for customer acquisition, visibility on the Google Search is critical and impacts on discoverability and website traffic. On Google Search itself, ranking matters as consumers show a predisposition to click on the first results assuming they are most relevant to the query,” the commission said.

The commission said that Google Search has evolved to provide greater visibility to paid results and its own properties relative to organic results for commercial search.

Although the commission said that paid ads are on a cost-per-click (CPC) auction basis, which technically allows for any platform to fight for a click, larger platforms have serious financial might and can contest more popular commercial search terms given the higher return on clicks.

It added that these measures influence organic search and favour large platforms that can invest in search engine optimisation (SOE) – meaning that small and medium enterprises (SMEs) often face a serious disadvantage.

This is particularly the case for black-owned platforms as they lack venture-capital backing domestically, it said.

Remedies

With Google Search favouring larger platforms, the inquiry suggested a host of remedial actions to improve paid and organic result visibility for smaller South African platforms.

In terms of organic results, Google must create a new platform site unit/carousel that will display smaller South African platforms relevant to the search – such as smaller South African platforms – for free and alter organic results with a content-rich display.

It must also introduce a South African flag identifier and platform search filter that will help consumers identify local businesses, allowing for increased competition between local and global platforms.

Regarding paid results, Google will also have to provide R180 million in advertising credits to small platforms to use in customer acquisition and free training to improve advertising campaigns.

R150 million will also have to be provided for training, product support and other measures for SMEs and black-owned firms to counter the competitive disadvantages on Google Search.

In addition, the inquiry found that Google Seach’s algorithm pushes traffic to its own shopping and travel services, which it found to distort competition. This is in line with similar findings in the European Union.

To address the issue, Google Search will have to stop self-preferencing its own products by applying the same measures seen in the EU.

“In the interests of both regulatory compliance for Google and oversight by the commission, Google is required to implement in South Africa measures taken in Europe to comply with similar provisions in the Digital Markets Act to address self-preferencing,” the inquiry said.

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