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EU Airlines Approve Google’s Proposed Search Result Changes under Digital Markets Act

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Google’s proposed updates to its search result presentation, aimed at complying with the EU’s Digital Markets Act (DMA), have received support from Airlines for Europe, a lobbying group representing major carriers like Air France KLM and Lufthansa.

The DMA mandates that tech giants like Google cannot prioritize their own products and services on their platforms, with non-compliance potentially resulting in fines of up to 10% of global annual turnover. Google has recently rolled out multiple adjustments to its search result formats to address demands from various stakeholders, including airlines, hotels, price-comparison websites, and small retailers. The latest modifications were announced in November.

Airlines for Europe commended Google’s proposed horizontal layout, which features equally sized boxes for airlines and comparison sites, as well as the use of the color blue to distinguish these elements from other search results. However, the group highlighted several areas for improvement in a letter to the European Commission dated December 20.

KEY CONCERNS AND SUGGESTIONS

  1. Price Consistency: Airlines for Europe stressed the need for displayed prices in the graphics to align with those within the search result boxes.
  2. Specific Dates: The group criticized Google’s proposal for indicative dates in search results, arguing that precise dates are essential for consumers booking air travel. The switch to vague dates, they warned, would significantly degrade the user experience.

Despite these concerns, the airline industry indicated its willingness to compromise in pursuit of a DMA-compliant solution.

POTENTIAL REVERSION TO OLD FORMAT

In response to ongoing disagreements among airlines, price-comparison websites, and other stakeholders, Google has indicated that it might revert to its older format of 10 plain blue links in search results. This format, used in the past, may be reintroduced if no consensus can be reached on compliant designs.

The European Commission continues to review Google’s efforts to align with the DMA, which is intended to level the playing field among digital platforms and their competitors. Airlines for Europe’s endorsement signals progress in balancing the needs of airlines and consumer interests while adhering to EU regulations.

 

Australia Proposes Law to Curb Big Tech’s Anti-Competitive Practices

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Australia has introduced a draft law aiming to strengthen digital competition by penalizing global technology giants for anti-competitive practices. The proposal, unveiled on Monday, seeks to impose fines of up to AUD 50 million (USD 33 million) on companies that hinder consumer choice or suppress innovation.

Key Provisions of the Proposed Law

  1. Scope and Oversight
    • The legislation would empower the Australian Competition and Consumer Commission (ACCC) to oversee compliance, investigate online anti-competitive behavior, and enforce penalties.
    • Platforms deemed to pose significant risks to competition, such as app stores, online search engines, and ad technology services, will be prioritized.
  2. Targeted Practices
    • Restrictions would prevent companies from:
      • Favoring their own services over third-party offerings.
      • Promoting poorly rated apps at the top of search results.
      • Using “sneaky tactics” to lock consumers into specific ecosystems.
    • These measures aim to simplify switching between services, enhancing competition across social media platforms, internet browsers, and app stores.
  3. Fine Details
    • Penalties of up to AUD 50 million would be imposed for violations, signaling Australia’s firm stance on regulating dominant tech players.
  4. Consultation Timeline
    • A public consultation period is open until February 14, 2024, after which the draft legislation will be finalized.

Broader Context

  • Inspired by the EU: The proposed law is modeled after the European Union’s Digital Markets Act, which enforces similar rules on Big Tech.
  • Recent Legislative Efforts: Last week, Australia banned social media usage for children under 16, reflecting broader efforts to regulate digital spaces.
  • Market Dominance:
    • Google: Controls 93%-95% of online search services in Australia.
    • Apple and Google: Together dominate the app store market, with Apple commanding 60% of downloads and Google Play Store 40%.
    • Meta: Facebook and Instagram account for 79% of social media usage in the country.

Government’s Position

Assistant Treasurer Stephen Jones highlighted that dominant platforms often restrict consumer choice, inflate costs, and stifle innovation by smaller players. The legislation aims to address these challenges and promote a fair digital economy.

Industry Response

Major tech companies, including Apple, Google, and Meta, have not yet commented on the proposal. However, the new regulations are expected to add to the growing scrutiny these companies face globally.

Implications

If enacted, the law could reshape Australia’s digital landscape by encouraging competition, enhancing transparency, and reducing consumer dependency on dominant platforms. This aligns with global trends of holding Big Tech accountable for their market influence.