EU Investigates Google Search Engine Preference Menus

Google's Market Dominance Challenged by Search Engine Competitors

Four companies competing with Google in the search engine market have appealed to European Union legislators. They are requesting the implementation of regulations concerning search engine preference menus to address Google’s sustained market leadership.

Calls for Fairer Competition

The rivals contend that Google’s control over default settings continues to hinder consumers’ ability to easily adopt alternative search engines. DuckDuckGo, Qwant, Lilo, and Ecosia jointly issued an open letter urging lawmakers to strengthen measures aimed at curbing the power of large tech platforms.

They assert that the Digital Markets Act (DMA) requires modification to prevent “gatekeepers” from suppressing competition within the search engine landscape. Specifically, they advocate for a legally mandated search engine preference menu.

Proposed Changes to the Digital Markets Act

This menu would prohibit Google from securing default search access on operating systems and browsers controlled by designated gatekeepers. Furthermore, the companies propose that consumers should be able to switch their default search engine with a single click, initiated through prompts from competing search engine applications or websites.

These changes, they believe, would significantly impact competition and ensure genuine consumer choice in the online search market.

The Digital Markets Act: A Brief Overview

The European Commission initially proposed the Digital Markets Act last year. It aims to establish a set of rules for large internet “gatekeepers” to prevent them from exploiting their market power to disadvantage competitors and harm consumers.

Concerns Regarding the Current Legislation

However, the four Google rivals express concern that the current draft of the DMA lacks provisions to effectively challenge Google’s dominance in Europe, where it holds approximately 93% of the market share. They are therefore requesting amendments to include binding regulations for search preference screens.

These regulations would guarantee consumers effortless access to switching their default search engine, regardless of whether they are using a mobile or desktop device.

Ongoing Negotiations

While the Commission drafted the initial DMA proposal, the European Parliament and member states, represented by the EU Council, must also reach an agreement on the final details. Negotiations regarding the regulation’s precise form are currently underway.

Google's Default Position as a Barrier

The search rivals emphasize that Google’s control over default search positions represents the most significant obstacle to competition. They argue that Google’s current market position is a direct result of years of securing these defaults.

They believe that if the DMA fails to address this fundamental issue, the existing situation will persist, leaving the underlying problem unresolved.

Previous Interventions and Google's Response

In 2018, the EU’s competition commission imposed a $5 billion fine on Google for antitrust violations related to its Android smartphone platform. Following this, Google introduced a regional search preference screen for new Android devices in Europe.

However, this was quickly replaced with a sealed-bid auction system, requiring competitors to pay Google to appear in available slots. This practice was widely criticized as unfair and lacking transparency.

Recent Changes and Remaining Limitations

Three years later, after further intervention from the Commission, Google abandoned the auction model in favor of a choice screen displaying eligible search rivals without charging a fee.

Despite this change, competitors pointed out ongoing limitations. The choice screen is only available on mobile devices and appears only during initial setup or factory resets, meaning most users never encounter it.

The Need for a Simplified Switching Process

DuckDuckGo, for instance, advocates for a “truly fair” search choice that allows consumers to switch their default search engine with a single click. They claim that currently, it takes over 15 clicks to change the default search engine on an Android device after the initial setup.

The rivals argue that employing such manipulative tactics to maintain self-preferencing defaults should be prohibited by EU law.

Support from EU Lawmakers

They highlight the support of MEP Yon-Courtin, who proposed mandating a properly designed preference menu in her draft report for the Economic Affairs committee.

The companies contend that Google’s limitations hinder consumer adoption of alternative search engines, despite the Commission’s antitrust decision.

Commission Response

The Commission has acknowledged receiving the letter and stated it is aware of the ongoing debate within the European Parliament and Council.

A spokesperson noted that the DMA already includes provisions aimed at increasing competition in the search engine sector, such as requiring gatekeepers to provide essential data to competitors and including a strong anti-circumvention clause.

The Commission is actively collaborating with co-legislators to ensure the DMA effectively achieves its objectives.

Update: A Commission spokesperson confirmed they have taken note of the letter, adding: “We are of course aware of the ongoing debate in the European Parliament and Council.”

“The DMA already includes several provisions specifically geared towards injecting contestability in the search engine sector, such as an obligation for gatekeepers to make essential data available to competing search engine providers. It also includes a strong anti-circumvention clause,” the spokesperson also said.

“The Commission is engaging constructively with both co-legislators in their objective to making the DMA most effective in achieving its goals in practice.”

Addressing the Challenge of Tech Dominance

For a considerable period, the European Commission has refrained from prescribing concrete solutions to Google, despite numerous antitrust rulings. Typically, EU legislators have maintained that it is Google’s responsibility to determine how to adhere to the various directives aimed at halting infringements in areas such as product search, search advertising intermediation, and the Android operating system.

Consequently, this lenient strategy adopted by the EU’s executive branch has enabled Google to sustain its leading position in crucial strategic markets like search – even with a series of significant antitrust enforcements within Europe.

This outcome presents a challenging situation for the EU’s competition commissioner, Margrethe Vestager, who has established a reputation as a resolute figure willing to confront large technology companies. However, her enforcement actions in the digital realm have not demonstrably altered the market share of these dominant platforms, nor prevented further consolidation by Google.

Nevertheless, a shift is occurring, with certain EU member states adopting a more proactive stance towards curbing the abusive market practices of Big Tech, a development poised to exert influence.

For instance, France’s competition authority recently mandated a set of interoperability requirements from Google in a case concerning the preferential treatment of its own adtech services.

Similarly, Germany’s Federal Cartel Office began this year with enhanced authority to implement preemptive remedies against digital corporations possessing substantial market power. Currently, it is evaluating whether Google – alongside other tech giants – meets these criteria, and appears prepared to establish preventative regulations governing their operations within Germany if warranted.

Beyond the EU, the United Kingdom is also revising its competition regulations to restrain Big Tech’s influence. It is developing an ex ante framework for digital giants with what it terms “strategic market status” – a system that, unlike the Commission’s approach with the Digital Markets Act, will not be universally applied.

Instead, the U.K. has indicated its intention to customize regulations to the specific characteristics of each business, granting its regulators greater flexibility to, for example, impose a search preference menu solution on a company like Google if deemed necessary.

The Commission’s centralized, uniform set of rules for Big Tech, therefore, may prove to be an inadequate instrument when confronted with exceptionally well-funded “innovators” who possess extensive experience in developing and refining services designed to minimize friction and facilitate greater scalability.

The EU’s executive branch faces the risk of being unprepared on the issue of tech antitrust, particularly as lawmakers globally – from China to the United States – are increasingly engaged and active in this area.

It is also noteworthy that following a particularly unfavorable week for (another technology company) Facebook, including Congressional testimony from the latest tech whistleblower, Francis Haugen, EU commissioners were quick to express their “urgency” to address Big Tech via social media.

Competition chief Vestager also posted on social media in the aftermath of the global Facebook outage – which simultaneously affected Instagram and WhatsApp, as all three social services share the same infrastructure and are owned by Facebook – emphasizing the need for “alternatives and choices in the tech market.”

Considering this prominent anti-consolidation message, EU citizens may reasonably question why Vestager’s department has not blocked a single technology acquisition, including Google’s recent purchase of health technology firm Fitbit?

What specific measures does Vestager propose to support startups and alternatives in achieving the necessary scale to effectively challenge established platform giants?

Unfortunately, her post did not offer any concrete solutions, so the quest for a viable remedy continues.

The direction of the Commission’s forthcoming Google antitrust investigation also remains uncertain.

This summer, the bloc’s executive confirmed its examination of Google’s adtech practices, a move that follows similar antitrust interventions already undertaken elsewhere in the region, including in the U.K. and France.

Meanwhile, Google is actively contesting the Commission’s existing antitrust enforcements against it.

Last week, its legal representatives appeared in court to appeal the Commission’s $5 billion Android antitrust penalty, arguing that the fine was based on flawed calculations, was not “proportionate,” and that the company had no intention of engaging in anti-competitive behavior.