Editor’s Note: The complaint discussed below appears, based on the article, to be an attempt at rent-seeking. The Economist describes rent-seeking as “Cutting yourself a bigger slice of the cake rather than making the cake bigger. Trying to make more money without producing more for customers. Classic examples of rent-seeking, a phrase coined by an economist, Gordon Tullock, include: … lobbying the GOVERNMENT for tax, spending or regulatory policies that benefit the lobbyists at the expense of taxpayers or consumers or some other rivals. Whether legal or illegal, as they do not create any value, rent-seeking activities can impose large costs on an economy.” [Emphasis added]
ShopCity the latest to call Google anticompetitive
ShopCity.com, a network of local shopping sites, has filed an antitrust complaint with the Federal Trade Commission against Google. The company shared a copy of the complaint with us. It says:
For most of its existence, ShopCity’s growth has been thwarted by unjustified Google penalties and anticompetitive Google prefacing. These matters were realized in writing with the Commission staff months ago, but the staff has not followed up in any respect.
It goes on to talk about how Google has been engaging in anticompetitive tactics since 2006, and that a number of injured vertical competitors have complained, but none have “received a CID or any other compulsory process necessary for a serious investigation.”
It then goes on to talk about Google penalizing Foundem and JC Penney in different ways, with Foundem getting worse treatment because of being a vertical competitor. More on the Foundem and JC Penney stories here and here respectively.
“The yawning chasm between the reality of Google’s penalty conduct and the pretense of Google’s public proclamations of no manual intervention demanded some further explanation and Google tendered an explanation of sorts shortly thereafter,” the complaint reads. “Matt Cutts, head of Google’s web spam team, acknowledged that the company had a program for imposing manual penalties and conceded that Google also released such penalties manually. Most manual penalties expire in thirty days, Cutts asserted. Google also imposed algorithmic penalties, Cutts said, which the company would not release manually. Cutts gave no explanation as to why Penney suffered a penalty of only a few weeks for blatantly cheating in a way that hurt consumers, while Google’s competitors like Foundem languished in the ‘penalty box’ for years for no transgression other than competing against Google.”
It goes on to talk about Google launching Universal Search, pulling in results from its various verticals into the main results, the famous Yelp complaints, and things of this nature.
All of this appears to be aimed at establishing Google’s alleged history of anticompetitiveness, something that has also been a topic of discussion in the Senate.
At its core, the main direct complaint appears to be that Google places its own results above ShopCity’s. “Based on relevance and quality, a ShopCity listing (for, say, a plumber in Midland) might rank near the top of search results (Because of Google’s preferencing, ShopCity could place no higher than the slot behind all of Google’s preferences listings.),” the complaint says. “But Google then took the extraordinary step of dropping all of ShopCity’s listings, generally to the fifth page of search results or beyond, relevance notwithstanding, where few users would ever find them.
Interestingly, when I perform a search for “plumber in midland” I don’t see any Google results whatsoever. Here’s what I see:
The same search on Bing actually does place Bing’s own local results above all else, despite the complaint saying, “Contrary to recent bleating by Google apologists who claim that other horizontal search providers also preference their own vertical offerings, Microsoft and Yahoo rarely placed their own captive local search results at the top of the page ahead of a ShopCity listing.
It’s a similar story with Yahoo:
To be fair, this is only one example (I’m sure there are indeed instances where Google puts its own results above ShopCity’s).
Bloomberg shares a quote from Google about ShopCity. A spokesman is quoted as saying, “This company was violating Google’s guidelines against duplicate and auto-generated content — which our users tell us they don’t like. We twice offered the company advice on how to improve their websites.”
Clearly, ShopCity doesn’t feel it’s getting the RESPECT it deserves from Google.