Consumer Watchdog Says Google Shopping Costs Consumers, Complains To FTC

perfume-google-shopping-product-listing-adsConsumer Watchdog has lodged a new complaint about Google’s “search monopoly” with the US Federal Trade Commission (FTC), this time saying Google Shopping results don’t pass the sniff test. The group calls the way the search engine displays its Product Listing ads “deceptive and unfair”, adding that Google Shopping’s paid listings are price gouging consumers.

In addition to competing shopping engines being shut out of top listings, consumers are “actually being harmed because the featured results from Google Shopping more often than not return higher prices than can be found elsewhere,” wrote John M. Simpson, Consumer Watchdog’s Privacy Project Director, in a letter to the Commission. The group’s evidence is based on a test in which it conducted just 14 product searches on Google and competing Comparison Shopping Engines.

For eight out of the 14, Consumer Watchdog said it found lower prices listed on other Comparison Shopping Engines (CSE), and claimed consumers “could pay as much as 67 percent more than” if they’d used another CSE. Conversely, in nearly half of the searches consumers would have found lower prices on Google Shopping. The study doesn’t clarify whether the lowest priced product in Google Shopping was selected as a comparison, just that “one of the products pictured in the Google Shopping results box” was chosen.

When Google converted Google Shopping to a wholly paid platform last year, it made a huge impact in the world of Comparison Shopping Engines. Just as Google monopolizes search results with its own products such as maps in Universal Search — pushing out competitors such as MapQuest — so too Google Shopping deliberately pushes out competing shopping engines say critics like Consumer Watchdog. While the FTC has previously dismissed such claims, the EU has conducted a three-year investigation into these issues and is currently in antitrust settlement talks with the company.

The Financial Times also conducted a small study in which it was able to find lower prices for products after clicking through to the full list of results on Google Shopping. Both studies appear to claim that Google favors retailer listings with higher prices because those retailers are getting higher margins and thus are willing to bid higher for Product Listing Ad placement: “The higher the price that merchants can recover, the more they are likely to bid to appear in the PLAs – and the higher the profits for Google.”

When it comes to driving traffic to retailer sites, Google Shopping’s product listing ads have been outperforming other CSEs by wide margins, according to reports from CPC Strategy. Kenshoo’s Cyber Monday data shows retailers invested heavily in Google Product Listing Ads (PLAs). Retailers spent 257 percent more year-over-year. In return, retailers saw a 217 percent year-over-year increase in conversions, and a 219 percent lift in revenue year-over-year from PLAs.

It should be noted that after criticizing Google’s move to paid shopping listings, Microsoft has also begun incorporating paid listings into its product search results.

In response to these studies, Ni Ahene, co-founder of CPC Strategy, which manages paid campaigns across the CSE spectrum, says, “The question that should be asked is, ‘Does Google (or any other comparison shopping engine for that matter) have a responsibility to display the lowest price on the top of SERPs for consumers, and if they choose not to default sort order by lowest price will consumers start doing their retail searches on websites that better expose this functionality?’
“Price is one of the more important factors consumers consider when making purchases online but it’s by no means the only variable. Other factors like seller reliability and shipping times all play a role in where a consumer ultimately ends up consummating their purchase. At the end of the day if Google develops a reputation of driving traffic to websites that provide a poor overall customer experience due to price ‘gouging’ or other factors, we see consumers shifting their search activities to retail search websites that do a better job matching products and sellers to query intent.”

Related Topics: Channel: Industry | Google | Google: AdWords | Google: AdWords: Product Listing Ads | Google: Antitrust | Google: Legal | Search Ads: Product Ads | Search Engines: Shopping Search Engines | Top News

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About The Author: writes about paid online marketing topics including paid search, paid social, display and retargeting. Beyond Search Engine Land, Ginny provides search marketing and demand generation advice for ecommerce companies. She can be found on Twitter as @ginnymarvin.

Connect with the author via: Email | Twitter



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  • http://www.brand.com/blog James R. Halloran

    Well, that’s bad for Google’s reputation! If Google’s hiding the “cheaper” competition cause they don’t have the revenue to pay their advertising rates, then Google’s not really functioning as the “know-all” search engine but a “highest bidder” search. Pure shame.

  • http://www.tylerherrick.com Tyler Herrick

    What a freaking joke. I don’t think people understand what a Monopoly is…

  • http://creativerty.com/ Rob jH

    Makes sense, if the retailers now have to pay to be at the top of the shopping results for something they were previously getting for free then they won’t take the hit the consumers will. The real annoying thing when they changed from paid to free was the fact that they got all the webmasters to change all the feed code right before doing it, which cost companies a lot of money only to then get hit with sorry now you have spent all that time updating your site you now have to pay to be included. Shopping results are a big honey pot for Google, a lot of consumers are not aware that its entirely paid inclusion.

  • http://www.withdrawalaid.com/ Dan T

    I use to love google. But they are getting way to Greedy. Greed is good? Not when you change SEO guidelines every several months effecting SMBS that have worked to get to the top. What about stablishing side deals with the big players with the idealistic approach to increase their stock price along with there “competitors”. Not to be hypocritical, but doesn’t this go against their own guidelines? Affiliate marketing….referrals….hmmm….I smell fish! Really stinky fish worth over $1k a pop. Start using Yahoo again!

  • Durant Imboden

    Google Shopping results are clearly labeled “sponsored” (another word for “advertising,” and not a new one, either). Why would anyone expect prices from other shopping engines to be included, when the Google Shopping results are paid ads?

  • Jenn

    We actually have to increase our prices because clicks went up from 22 cents to 49 cents and we are getting 10% of the traffic, what is google thinking a COMPARISON shopping click merchants have to pay, 2 dollars a click? Of course when the biggest and pretty much only search giant does things that switch markets that way, it is very much indeed a monopolistic abuse.

    For the sarcastic people here, who think google is not a monopoly, I want to ask, do you really think that when everyone else goes out of business in the search and ads industry, we will be able to label google a monopoly?.

    Google became an abusive monopoly the minute they decided to cut the search results and replace them with ads, then manipulate ads. ( We are required to pay 3 dollars per click for terms we are the only ones bidding on ).

    If someone asks you to work and work and modify your site and business to rank and perform and you work super hard to feed a search engine with content they will use to profit from and then they slap you in the face and kill SEO and drastically change the Ads, policies and requirements, that is abuse and only a monopoly can get away with that. Search is search, is simple, google controls every single bit of data and search and have very powerful tools to detect click fraud and spammers, no need to be changing rules every week, they also have the tools to let advertisers know who is clicking the ads and they also have the tools to show people a chart of bids, just so people can see that in a lot of inflated keyword terms where you are required to pay 2 or 3 dollars a click, you are actually the only one bidding. Google makes money only by fooling the people in the stock market, the FTC has to step in, you will see one day they will but until then, the few top greedy execs will make us bleed and pay double for every piece of merchandise sold online. Tell me I’m wrong please, and please, elaborate and tell me why?

  • Jenn

    We actually have to increase our prices because clicks went up from 22 cents to 49 cents and we are getting 10% of the traffic, what is google thinking a COMPARISON shopping click merchants have to pay, 2 dollars a click? Of course when the biggest and pretty much only search giant does things that switch markets that way, it is very much indeed a monopolistic abuse.

    For the sarcastic people here, who think google is not a monopoly, I want to ask, do you really think that when everyone else goes out of business in the search and ads industry, we will be able to label google a monopoly?.

    Google became an abusive monopoly the minute they decided to cut the search results and replace them with ads, then manipulate ads. ( We are required to pay 3 dollars per click for terms we are the only ones bidding on ).

    If someone asks you to work and work and modify your site and business to rank and perform and you work super hard to feed a search engine with content they will use to profit from and then they slap you in the face and kill SEO and drastically change the Ads, policies and requirements, that is abuse and only a monopoly can get away with that. Search is search, is simple, google controls every single bit of data and search and have very powerful tools to detect click fraud and spammers, no need to be changing rules every week, they also have the tools to let advertisers know who is clicking the ads and they also have the tools to show people a chart of bids, just so people can see that in a lot of inflated keyword terms where you are required to pay 2 or 3 dollars a click, you are actually the only one bidding. Google makes money only by fooling the people in the stock market, the FTC has to step in, you will see one day they will but until then, the few top greedy execs will make us bleed and pay double for every piece of merchandise sold online. Tell me I’m wrong please, and please, elaborate and tell me why?

  • Pierre Gardin

    I tried the hard drive query (“Seagate Backup Plus 1TB External USB 3.0 Portable Hard Drive”).

    Nextag returns nothing (???).
    Shopzilla returns $79.99
    Pricegrabber return $89.95
    Google returns $51.98
    Amazon returns $74.95

    This is indeed deception, but Consumer Watchdog is the culprit.

  • Pierre Gardin

    I tried the hard drive query (“Seagate Backup Plus 1TB External USB 3.0 Portable Hard Drive”).

    Nextag returns nothing (???).
    Shopzilla returns $79.99
    Pricegrabber return $89.95
    Google returns $51.98
    Amazon returns $74.95

    This is indeed deception, but Consumer Watchdog is the culprit.

  • lasilasi

    This is weasel words in action.

    - 8 times out of 14, there are lower prices listed on other Comparison Shopping Engines (CSE)? This means that 6 times out of 14, almost half of the time, Google Shopping had the cheapest price out of all CSEs that they tested. It would be great if Google Shopping always has the cheapest price, but half is not that bad, considering they have compared with many different CSEs.

    - “as much as 67 percent more”: “Save up to 50% on your insurance”… in 1% of the case, pay more everywhere else. 67 percent is only one of the extreme values, the one they wanted to report. What is the other extreme value? Up to how much was it possible to save using Google Shopping compared to other CSEs? On average, do you pay more or less? Consumer Watchdog does not care…

    How can you lodge a complaint to the FCC, based on a study of 14 (fourteen) examples???

  • lasilasi

    This is weasel words in action.

    - 8 times out of 14, there are lower prices listed on other Comparison Shopping Engines (CSE)? This means that 6 times out of 14, almost half of the time, Google Shopping had the cheapest price out of all CSEs that they tested. It would be great if Google Shopping always has the cheapest price, but half is not that bad, considering they have compared with many different CSEs.

    - “as much as 67 percent more”: “Save up to 50% on your insurance”… in 1% of the case, pay more everywhere else. 67 percent is only one of the extreme values, the one they wanted to report. What is the other extreme value? Up to how much was it possible to save using Google Shopping compared to other CSEs? On average, do you pay more or less? Consumer Watchdog does not care…

    How can you lodge a complaint to the FCC, based on a study of 14 (fourteen) examples???

  • http://www.thefind.com/ Shashikant Khandelwal

    You should also try TheFind, which has 30 times the number of products at nextag/shopzilla et al.

  • http://www.thefind.com/ Shashikant Khandelwal

    You should also try TheFind, which has 30 times the number of products at nextag/shopzilla et al.

  • Pierre Gardin

    So in your crystal ball, Yahoo and Bing went out of business? Interesting.

  • Mary Kay Lofurno

    I have found this to be true many times. Its not always the lowest price

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