Google is caught in the global antitrust network, and local search is accused of favoring its own services

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Tencent technology news on September 20, transnational operation of companies usually brings many benefits, including more income from more consumers. But large American technology companies have found that this model also has many disadvantages. For example, they are facing stricter regulation in every country where they make money.
It is difficult to track all antitrust actions related to science and technology around the world, in part because they do not always deserve close attention. For a long time, Europe has always been the location of the world’s most radical regulator. Google alone was fined $2.7 billion in 2017, $5 billion in 2018 and $1.7 billion in 2019. These figures are devastating for most companies, but they are only a drop in the bucket for the technology giant, which reported revenue of $61.9 billion last quarter.
However, more and more countries are beginning to go beyond minor fines. Instead, they are forcing technology companies to change their business models. In February, Australia passed a law giving news publishers the right to bargain with the dominant Internet platform, in fact against Facebook and Google.
In August, South Korea became the first country to force apple and Google to open mobile app stores to replace payment systems, threatening their control over developers’ 30% commission. At the same time, Google will soon have to respond to the request of the Turkish competition authority to stop favoring its own services in local search results.
The consequences of such cases may go far beyond the national boundaries for the implementation of the new regulations, prompting regulators in other countries to follow suit. For example, the fact that Google and Facebook acquiesced in Australia’s media bargaining rules may accelerate similar efforts in other countries, including Canada and even the United States. As yelp’s senior vice president in charge of public policy, Luther Lowe has been lobbying for antitrust action against Google for more than a decade. He praised this phenomenon as a “remedy for quietly spreading”.
In other cases, companies forced to change their business model overseas may adopt this change globally after being forced to change. After settling an investigation with Japan’s Fair Trade Commission, apple decided to implement a new strategy around the world to allow audio, video and reading applications to link to its website and accept consumer payments.
Anu Bradford, a professor of international and antitrust law at Columbia University, said: “sometimes the market is driving it: these companies think that it is too expensive to formulate different compliance strategies in different markets. Or sometimes it is out of expectation of imitation regulation: they know it exists and they will not wait for Russia or Turkey to file a case.”
Although the Turkish lawsuit did not receive media attention like Australia and South Korea, the case may eventually become the most influential settlement agreement. This is because the case hits the heart of how Google uses its power as the “gatekeeper” of most Internet traffic.
This case is related to so-called local search, such as when you search “restaurant near me” or “hardware store”. According to many analysts, this is a huge category of search traffic, accounting for almost half of Google’s total search. Google’s critics and competitors have long complained that Google unfairly uses its dominant position to guide local search results to its products, even if it may not be the most helpful result.
Think about it. If you search for “Chinese restaurant” on Google, a gadget called onebox may appear at the top of the result page. What will the result be? This gadget will include part of Google maps and some Google comments on Chinese restaurants near you. You must scroll down to find useful search results at the top of the list, which may come from yelp or TripAdvisor.
Over the years, Google’s approach has angered many of its critics and competitors. Yelp, one of the most aggrieved competitors, initiated a lawsuit in Turkey and lodged a complaint with the country’s competition authority. Google argues that its local search results are designed to help users to the greatest extent, not to make a profit. However, Turkish regulators do not agree with this view. They concluded that Google “abused its dominant position in the general search service market to promote its local search and accommodation price comparison services in a way that excludes competitors, in violation of the Turkish anti competition law”.
In April this year, the Turkish team fined Google about $36 million, but this is less than the money Google will make in two hours in 2020. However, although the amount of the fine appears insignificant, the rest of the decisions are not. The agency issued a preliminary ruling ordering Google to launch a way to display local search results, which should not only benefit itself, but also take into account the interests of competitors.
At present, the case is still pending. The Turkish competition authority still needs to issue a “reasonable opinion” detailing its conclusions. Google will then have the opportunity to submit its proposal to comply with the ruling, which will be evaluated by the competition authority.
This is not the first time Google has been hit in Turkey. In 2018, the country’s competition authority made a similar ruling on Google shopping and found that Google favoured its own services relative to other comparative shopping websites. Followed by a similar case in the EU, but the difference is that in that case, the EU accepted Google’s solution, although its competitors thought it was far from enough.
Turkish regulators did not do so, which gave Google a choice: either come up with a solution that regulators would accept, or stop Google shopping in Turkey. The company chose the latter and simply closed its comparative shopping service in the country.

Google can do the same thing in the current situation, but the stakes will be much higher. The share of local search in the whole search cake is much larger. Turkey, with a population of 85 million, is a big market. Abandoning local search will deprive a common function in a large market. This means that the company has greater incentive to propose a solution that will not be rejected by the competition authority. But this in turn poses an additional risk that any solution taken by Turkey may be introduced elsewhere.
Luther Lowe of yelp said: “if you are one of these dominant companies in the world, the disadvantage is that if a jurisdiction implements antitrust remedies, it may cause a huge domino effect. Because suddenly, U.S. Senator Amy Klobuchar You can raise her smartphone at the Senate hearing and question Sundar Pichai: “I have activated my Turkish VPN now. It seems that Turkish consumers buy it more cost effectively than those in Minnesota.”
Google has not announced any proposed remedies. Emily Clarke, a spokesman for the company, said that the company is waiting for the full disclosure of its opinions before it can find out what its legal obligations are. Yelp argues that whoever wins search results should win the right to let its API support onebox results, because in theory, Google’s own algorithms have considered them the most relevant results.
In other words, if the current search result is Google maps in onebox, but the first link below is from yelp, yelp should appear in onebox. This means that when you try to find out where to eat, you will first see yelp’s comments, not Google’s comments.
Such a change, if widely adopted, could dramatically reshape the flow of large amounts of Internet traffic. As analyst Rand Fishkin pointed out in 2019, more than 50% of Google searches end without users clicking on another website. This is partly because, as recorded by markup last year, Google’s own services or “direct answers” account for more than half of the first page users see when searching on mobile devices.
“If this jurisdiction forces them to act in an interoperable and non discriminatory manner, it basically restores Google’s original mechanism. It is like a revolving door, and the flow to third-party services will increase,” Luther law said
It’s easy to understand why companies like yelp want a piece of the highest price. The question is whether Turkish regulators will force Google to give them. If so, will Google agree or let Turkish users return to the original 10 blue links. Either way, the consequences may not be limited to Turkey. American technology companies have conquered the world, and now national regulators want to counter it. (reviewed by Tencent technology / Jinlu)