Consumers pay more because of Google's search monopoly

SANTA MONICA, USA: Google is taking advantage of its monopoly position in search to charge merchants more for placement in Google Shopping, causing higher prices for consumers, a Consumer Watchdog study has found.

The nonpartisan, nonprofit public interest group is filing the study, made Nov. 11 and Nov. 12, with the European Commission as part of the group's comments on a proposal to settle the Commission's antitrust investigation of Google.

"Google used classic monopolistic tactics to largely clear the field of competitors and then changed its business model to maximize its profits by charging merchants for placement," said John M. Simpson, Consumer Watchdog's Privacy Project director. "Merchants then charge consumers more for the product to cover their payment to Google."

Consumer Watchdog studied product results returned through Google Shopping on the Internet giant's Universal Search and compared prices for the same item listed on three competing comparison shopping engines (CSEs), Shopzilla, Pricegrabber and Nextag. Checking prices for 14 items this month, Consumer Watchdog found Google listings as much as 67 percent higher. In eight of 14 cases lower prices were available on a competing CSE, the study found.

Some have suggested that Google's business tactics enabled by its monopoly position only damage competing services. In fact, Consumer Watchdog said Google hurts consumers in two ways. First, Universal Search populates the top of the results page mainly with results from Google's own services. This moves the Internet giant closer to an ecosystem where real consumer choice no longer exists. Second, as the Consumer Watchdog test shows, consumers are paying higher prices because of Google's behavior.