Improving quality isn’t anti-competitive

Google has always worked to improve its services, creating new ways to provide better answers and show more useful ads. We’ve taken seriously the concerns in the European Commission’s Statement of Objections (SO) that our innovations are anti-competitive. The response we filed today shows why we believe those allegations are incorrect, and why we believe that Google increases choice for European consumers and offers valuable opportunities for businesses of all sizes.

The SO says that Google’s displays of paid ads from merchants (and, previously, of specialized groups of organic search results) “diverted” traffic away from shopping services. But the SO doesn’t back up that claim, doesn’t counter the significant benefits to consumers and advertisers, and doesn’t provide a clear legal theory to connect its claims with its proposed remedy.

Our response provides evidence and data to show why the SO’s concerns are unfounded. We use traffic analysis to rebut claims that our ad displays and specialized organic results harmed competition by preventing shopping aggregators from reaching consumers. Economic data spanning more than a decade, an array of documents, and statements from complainants all confirm that product search is robustly competitive. And we show why the SO is incorrect in failing to consider the impact of major shopping services like Amazon and eBay, who are the largest players in this space.

The universe of shopping services has seen an enormous increase in traffic from Google, diverse new players, new investments, and expanding consumer choice. Google delivered more than 20 billion free clicks to aggregators over the last decade in the countries covered by the SO, with free traffic increasing by 227% (and total traffic increasing even more).

Moreover, the ways people search for, compare, and buy products are rapidly evolving. Users on desktop and mobile devices often want to go straight to trusted merchants who have established an online presence. These kinds of developments reflect a dynamic and competitive industry, where companies are continuing to evolve their business models and online and offline markets are converging.

But our central point is our consistent commitment to quality — the relevance and usefulness of our search results and the ads we display. In providing results for people interested in shopping, we knew we needed to go beyond the old-fashioned “10 blue links” model to keep up with our competitors and better serve our users and advertisers. We developed new ways to organize and rank product information and to present it to users in useful formats in search and ads. In 2012, as part of that effort, in addition to our traditional ads, we introduced the Google Shopping Unit as a new ad format:

We don’t think this format is anti-competitive. On the contrary, showing ads based on structured data provided by merchants demonstrably improves ad quality and makes it easier for consumers to find what they’re looking for. We show these ad groups where we’ve always shown ads — to the right and at the top of organic results — and we use specialized algorithms to maximize their relevance for users. Data from users and advertisers confirms they like these formats. That’s not “favoring” — that’s giving our customers and advertisers what they find most useful.

The SO also seeks a peculiar and problematic remedy, requiring that Google show ads sourced and ranked by other companies within our advertising space. We show in our response that this would harm the quality and relevance our results. And, in a report submitted with our response, former President of the General Court Bo Vesterdorf outlines why such an obligation could be legally justified only where a company has a duty to supply its own rivals – as where it controls an input that is both essential and not available anywhere else (like gas or electricity). Given the many ways to reach consumers on the Internet, the SO doesn’t argue that standard applies here.

Our search engine is designed to provide the most relevant results and most useful ads for any query. Users and advertisers benefit when we do this well. So does Google. It’s in our interest to provide high-quality results and ads that connect people to what they’re looking for. The more relevant the ads — the better they perform in connecting potential buyers and sellers — the more value they generate for everyone.

Throughout the almost 17 years since Google started, our engineers have been developing innovative approaches to search and ads that are valuable for both users and advertisers. In the video below you can hear from our engineers about how our services have evolved to give people better results and ads. We are proud of their work and eager to tell their story.

We believe that the SO’s preliminary conclusions are wrong as a matter of fact, law, and economics. We look forward to discussing our response and supporting evidence with the Commission, in the interest of promoting user choice and open competition.

Posted by Kent Walker, SVP & General Counsel Continua a leggere

Android has helped create more choice and innovation on mobile than ever before

It’s hard to believe, but smartphones barely existed ten years ago. People used feature phones, which had very basic functionality, and were a nightmare for developers. The only way to build apps was device by device and platform by platform—Google had a closet full of hundreds of phones that we tested one by one each time we wanted to launch new software.

Android was born from this frustration. We hoped that by offering a great, free open-source operating system, we could turbocharge innovation by allowing manufacturers and developers to focus on what they do best. At the time, most people thought this plan was nuts.

Fast forward to today. The pace of mobile innovation has never been greater. Smartphones are being adopted globally at an increasingly fast pace, with over hundreds of millions shipped each quarter, and the average smartphone price fell 23% between 2012 and 2014. It’s now possible to purchase a powerful smartphone, without subsidies or contracts, for under $100. And the app ecosystem has exploded, giving consumers more choice than ever before.

Android has been a key player in spurring this competition and choice, lowering prices and increasing choice for everyone (there are over 18,000 different devices available today);

  • It’s an open-source operating system that can be used free-of-charge by anyone—that’s right, literally anyone. And it’s not just phones. Today people are building almost anything with Android—including tablets, watches, TVs, cars, and more. Some Android devices use Google services, and others do not.
  • Our Google Play store contains over one million apps and we paid out over $7 billion in revenue over the past year to developers and content publishers.
  • Apps that compete directly with Google such as Facebook, Amazon, Microsoft Office, and Expedia are easily available to Android users. Indeed many of these apps come pre-loaded onto Android devices in addition to Google apps. The recent Samsung S6 is a great example of this, including pre-installed apps from Facebook, Microsoft, and Google.
  • Developers have a choice of platforms and over 80% of developers are building apps for several different mobile operating systems.

The European Commission has asked questions about our partner agreements. It’s important to remember that these are voluntary—again, you can use Android without Google—but provide real benefits to Android users, developers and the broader ecosystem.

Anti-fragmentation agreements, for example, ensure apps work across all sorts of different Android devices. (After all, it would be pretty frustrating if an app you downloaded on one phone didn’t also work on your eventual replacement phone.) And our app distribution agreements make sure that people get a great “out of the box” experience with useful apps right there on the home screen (how many of us could get through our day without maps or email?). This also helps manufacturers of Android devices compete with Apple, Microsoft and other mobile ecosystems that come preloaded with similar baseline apps. And remember that these distribution agreements are not exclusive, and Android manufacturers install their own apps and apps from other companies as well. And in comparison to Apple—the world’s most profitable (mobile) phone company—there are far fewer Google apps pre-installed on Android phones than Apple apps on iOS devices.

We are thankful for Android’s success and we understand that with success comes scrutiny. But it’s not just Google that has benefited from Android’s success. The Android model has let manufacturers compete on their unique innovations. Developers can reach huge audiences and build strong businesses. And consumers now have unprecedented choice at ever-lower prices. We look forward to discussing these issues in more detail with the European Commission over the months ahead.

Hiroshi Lockheimer, VP of Engineering, Android Continua a leggere

The Search for Harm

In the summer of 2010, Google announced plans to acquire the flight search provider, ITA. As we said at the time, while many people buy their airline tickets online, finding the right flight at the best price can be a real hassle. Today Google Flight Search has made that much easier. Search for “Flight CDG to SFO” and you get the different options right there on the results page. It’s a great example of Google’s increasing ability to answer queries directly, saving people a lot of time and effort — because as Larry Page said over a decade ago “the perfect search engine should understand exactly what you mean and give you back exactly what you want”.

At the time of the ITA acquisition, several online travel companies–Expedia, Kayak, and Travelocity–unsuccessfully lobbied regulators in the US and the European Union to block the deal, arguing that our ability to show flight options directly would siphon off their traffic and harm competition online. Four years later it’s clear their allegations of harm turned out to be untrue. As the Washington Post recently pointed out (in an article headed “Google Flight Search, four years in: not the competition-killer critics feared”) Expedia, Orbitz, Priceline and Travelocity account for 95% of the US online travel market today. It’s a similar situation in Europe too, as this graph for Germany neatly shows:

Travel sites in Germany

Source: ComScore MMX and Google data (for Google), desktop traffic, unique visitors (‘000s)

We’ve seen similar allegations of harm from competitors in other areas. And the European Commission today confirmed that it is sending Google a Statement of Objections (SO) regarding the display and ranking of shopping results.

While Google may be the most used search engine, people can now find and access information in numerous different ways — and allegations of harm, for consumers and competitors, have proved to be wide of the mark.

More choice than ever before
In fact, people have more choice than ever before.

  • There are numerous other search engines such as Bing, Yahoo, Quora, DuckDuckGo and a new wave of search assistants like Apple’s Siri and Microsoft’s Cortana.
  • In addition, there are a ton of specialized services like Amazon, Idealo, Le Guide, Expedia or eBay. For example, Amazon, eBay, and Axel Springer’s Idealo are the three most popular shopping services in Germany.
  • People are increasingly using social sites like Facebook, Pinterest and Twitter to find recommendations, such as where to eat, which movies to watch or how to decorate their homes.
  • When it comes to news, users often go directly to their favorite sites. For example, Bild and The Guardian get up to 85% of their traffic directly. Less than 10% comes from Google.

Of course mobile is changing things as well. Today 7 out of every 8 minutes on mobile devices is spent within apps — in other words consumers are going to whichever websites or apps serve them best. And they face no friction or costs in switching between them. Yelp, for example, has told investors they get over 40% of their traffic direct from their mobile app. So while in many ways it’s flattering to be described as a gatekeeper, the facts don’t actually bear that out.

Thriving competition online
Which brings me to the competition. Companies like Axel Springer, Expedia, TripAdvisor, and Yelp (all vociferous complainants in this process) have alleged that Google’s practice of including our specialized results (Flight Search, Maps, Local results, etc.) in search has significantly harmed their businesses. But their traffic, revenues and profits (as well as the pitch they make to investors) tell a very different story.

  • Yelp calls itself the “de facto local search engine” and has seen revenue growth of over 350% in the last four years.
  • TripAdvisor claims to be the Web’s largest travel brand and has nearly doubled its revenues in the last four years.
  • Expedia has grown its revenues by more than 67% over the same period — and recently told investors: “We’re seeing increased traffic coming through Google Hotel Finder. It is ­clearly getting more exposure. And in general … the product continues to improve. And Google has invested in it, we’ll continue to invest in it … From our standpoint, we’re happy to play in any market that Google puts out there and over a long period of time, we have proven an ability to get our fair share in the Google marketplaces.” (Remarkable given their complaints).
  • Axel Springer continues to invest in search, including the French search engine Qwant, because as the company told investors, “there is a lot of innovation on the search market”.

Indeed if you look at shopping — an area where we have seen a lot of complaints and where we understand the European Commission will focus its Statement of Objections — it’s clear that (a) there’s a ton of competition (including from Amazon and eBay, two of the biggest shopping sites in the world) and (b) Google’s shopping results have not the harmed the competition. Take a look at these graphs:

Shopping Sites in Germany (unique visitors, ‘000s)

Shopping Sites in France (unique visitors, ‘000s)

Shopping Sites in the UK (unique visitors, ‘000s)

Any economist would say that you typically do not see a ton of innovation, new entrants or investment in sectors where competition is stagnating — or dominated by one player. Yet that is exactly what’s happening in our world. Zalando, the German shopping site, went public in 2014 in one of Europe’s biggest-ever tech IPOs. Companies like Facebook, Pinterest and Amazon have been investing in their own search services and search engines like Quixey, DuckDuckGo and Qwant have attracted new funding. We’re seeing innovation in voice search and the rise of search assistants — with even more to come.

It’s why we respectfully but strongly disagree with the need to issue a Statement of Objections and look forward to making our case over the weeks ahead.

By Amit Singhal, Senior Vice President, Google Search Continua a leggere

Settlement with the European Commission

Following three rounds of negotiations and significant concessions, we are glad to have now reached an agreement with the European Commission that addresses its competition concerns.

Commissioner Almunia laid out the details of that settlement at a press conference last week, including:

  • Changes to our AdSense terms to make it even easier for publishers to place ads on their sites from multiple providers;
  • Changes to our AdWords API terms to make it even easier for software providers to build tools for advertisers to manage campaigns across platforms;
  • New rules regarding how we will use website content in vertical search services; and
  • Changes to our UI that will give rival services significant prominence (and valuable screen space) on our search results pages. You can see what this looks like here.

In addition, our suggested changes have (unusually) been through two separate “market tests” which enabled the Commission to hear directly from a number of our competitors, as well as third parties. In response to their feedback, we made two rounds of significant further changes to our initial proposals. Today, to ensure that everyone understands the wide-ranging nature of this settlement, we are taking the (again unusual) step of publishing the full text of the agreement.

While this process has been challenging, we are pleased to have a resolution of these issues and look forward to a continued focus on providing new generations of great services for our users.

Posted by Kent Walker, Senior Vice-President and General Counsel
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Moving Forward

For the past two years we’ve worked closely with the European Commission to settle their inquiry into our search and advertising businesses. We’ve put a lot of effort into addressing the Commission’s concerns, and earlier this year, after a good bit of back-and-forth with the Commission, we proposed a package of measures that the Commission felt comfortable testing in the marketplace.

The Commission subsequently asked us to go even further, including giving rival sites much more visibility in our search results. (The Commission has since confirmed that it seeks to promote visibility rather than to mandate where consumers click.) We addressed these requests with our revised offer, which broadens the scope of our offer and provides links to rival sites even more prominently in our search results. Specifically:

  • We will give links to rival sites much more real estate and visibility
  • We will include rival sites’ logos with these links for even greater prominence
  • We will accompany these links with dynamic text from rivals providing more information about their sites

This news was widely reported in the press and you can see screenshots of these proposed links here.

As European Commission Vice President Joaquin Almunia said in a recent speech, the issue is choice for consumers. We’ve worked closely with a knowledgeable and professional team at the Commission to deliver just that. Users will be presented with alternative specialized search options right in the middle of some of the most valuable and prominent space on our search page. It is hard to see how anybody could reasonably claim that this will not offer users choice.

These weren’t easy concessions to make. Within Google, many asked why we would agree to such unprecedented and far-reaching changes to our continuously evolving search results. But we didn’t want to spend a decade fighting over these issues. We wanted to move forward, letting our engineers continue to do what they do best: building products that help users in their everyday lives.

Of course, we will never satisfy some critics, especially those with a professional and financial interest in impeding a successful competitor rather than helping users. As Upton Sinclair once said, “It is difficult to get a man to understand something when his salary depends upon his not understanding it.” Some in the anti-Google camp have lobbied for remedies that would help themselves at a cost to consumers. Others have worked to prolong the process to keep us in regulatory limbo, filing new complaints timed to disrupt our settlement negotiations. These complainants continue to recycle claims with no basis in law or fact, while failing to present constructive or realistic suggestions that would benefit consumers.

We’ve gone the extra mile to come up with a settlement that will resolve the Commission’s expressed concerns and allow everyone to focus on competing on the merits and creating innovative new services for consumers. We look forward to bringing this matter to a sound and reasonable conclusion.

Posted by Kent Walker, Senior Vice President and General Counsel
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Visualizing Online Takedown Requests: Challenge Winners!

Alexandra Papas is Community and Events Coordinator at Visualizing.org.

In our latest challenge, designers and creative coders visualized Google’s Transparency Report with the aim of adding context or insight to our understanding of the openness of the internet. In the report, Google discloses the number of requests received from copyright owners and governments to remove information from their services. Of the fantastic projects that were submitted—check them all out in our gallery—judges selected projects that best made sense of the complexity of the data, offered innovation in approach and design, and compelled us to explore more.

Congratulations to Frontwise with their winning project Google Online Takedown Requests Browser. Judges appreciated its beautiful design and the ample functionality to discover patterns and trends, including filters by dataset, time period, copyright owner, and target domains. Additionally, the organization by time and volume and distribution between an outer ring and inner ring of the monthly overview of requests and targeted domains or products presented the data neatly and effectively.

Simon Schulz is awarded second place for Country Based Google Transparency Report. As the only project to offer a detailed breakdown of the data by country rather than a more summary approach, judges felt the project provided an important point of view, one that could be a nice complement to the Transparency Report itself.

Prism by Felix Gonda takes third place for its focus—breaking down the volume of the data by country of origin, reason of request, and Google’s products—and fluid interactivity that allowed easy exploration and comparison. Judges also noted its polish and creative solution.

Frontwise, Simon, and Felix will receive $3250, $1250, and $500 respectively for their great work. Thank you to Google, our jurors, and all participants!

Want to try your hand at another project? Take a look at our Visualizing Hospital Price Data challenge, offering $30,000 in prizes. We look forward to seeing your work!


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Answers people want

You expect Google to give you the very best search results. Just the right information, at just the right time, without hassle or cost. We started out by showing you ten blue links. Advances in computer science now let us provide richer and better answers, saving a lot of time and effort. If you search for the “height of the Eiffel Tower”, that’s probably what you want – right there on your screen or mobile phone, not several clicks away. So that’s what we give you. Ask Google for places to eat in New York and we aim to show pictures of restaurants, plus reviews, prices, hours, location, directions, and more. All right there, with no extra effort required.

We’ve been discussing these innovations with the European Commission as they have reviewed our search and advertising business. We know that scrutiny comes along with success, and we have worked hard to answer their questions thoroughly and thoughtfully. When the Commission outlined four areas of “preliminary” concern last summer, we submitted proposals to address each point in a constructive way. Our proposals are meaningful and comprehensive, providing additional choice and information while also leaving room for future innovation. As we’ve always said, we build Google for users, not websites. And we don’t want to hamper the very innovations that people like best about Google’s services. That’s why we focused on addressing the Commission’s specific concerns, and we think we did a pretty good job.

The Internet is the greatest level playing field ever. More and more, people are voting with their feet (or at least their cursors), getting information from apps, general and specialised search engines, social networks, and a multitude of websites. That free flow of information means that millions of websites (including ours) now compete directly for business, bringing you more information, lower prices, and more choice. We very much appreciate the Commission’s professionalism and integrity throughout this process, and look forward to reaching a sensible solution.

Posted by Kent Walker, Senior Vice President and General Counsel
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Imagining Better Cities through Apps

Adrienne St. Aubin is a Policy Analyst at Google

Google is excited to sponsor this year’s international AppMyCity! Prize from the New Cities Foundation, celebrating mobile applications that improve the urban experience, connect people, and make cities more fun, vibrant, sustainable places.

We’re bullish on the value of open public data to inspire innovation and improve citizens’ daily lives. Last year Francisca Rojas of Harvard Kennedy School’s Transparency Policy Project highlighted the positive impact of open transit data on the number of transit apps developed—and the indication that more people are likely to utilize public transportation systems when apps help improve the experience via real-time information. Imagine the possibilities for other kinds of public data like health, employment, education, environmental, demographic and cultural info.

The first step toward generating value from public data is for governments to make data available in machine-readable formats, not just PDFs or image files, and ensure it stays up to date. No one wants to build or use an app that shows out-of-date schedules or last year’s parking zones. But governments aren’t the only ones who have a responsibility here, even though they are the generators and keepers of the data. Developers and citizens have a role to play too, by using what’s out there, giving feedback about how it can be improved, and growing the demand side of the market.

Of course, the value of open data isn’t just about apps. But creating and using apps is one of the most concrete ways we can engage with the public information around us. Imagine together how it can make our communities—and the world—a better place.

About the AppMyCity! Prize

Entries are now being accepted at www.appmycity.org and the submission deadline is April 26, 2013. The New Cities Foundation will announce ten semi-finalists on April 30, 2013. This list will be assessed by a panel of expert judges, who will select the three finalists. The finalists will be announced on May 7, 2013.

Three AppMyCity! Prize finalists will be invited to attend the New Cities Foundation’s New Cities Summit in São Paulo June 4-6 to present their project to an international audience of urban leaders, thinkers and innovators, and the winner will receive 5,000 USD to support further development of the app.


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