Google–a ruthless monopolist

By Adam Raphael
In an era of corporate hospitality, big data and commission payments, the Guide’s mission to promote outstanding small independent hotels is needed more than ever. But our task is getting harder because of the way Google ruthlessly manipulates its search results to maximise its profits.

The Guide’s business model is simple. An entry in our print edition is free, decided on merit alone. If, however, one of our selected hotels wishes to appear on the Guide’s website, it pays a fee ranging from £160 to £725 depending on its number of rooms. The Guide could not exist without these web payments. Our future therefore depends on reaching the largest possible world-wide audience. The good news is that our internet traffic is growing, a 100% increase over the past year in organic search. The bad news is that the Guide is at the mercy of Google. It now accounts for the overwhelming majority (92%) of all UK searches and 87% of world-wide searches. In short, Google has succeeded where Genghis Khan, Communism and Esperanto all failed. As the New York Times noted: ‘It now dominates the globe’.

With domination, however, comes responsibility. And here Google, which manages five billion searches every day, a staggering 63,000 every second, behaves less like a valued public utility than a greedy monopolist. In the last three years, it has been fined more than £7 billion by the European Commission in three separate cases alleging anti-competitive conduct. Despite these sizeable fines, a fleabite in relation to its huge profits, Google’s ambition to monetise the internet has not waned.

Google has now begun to manipulate its search results to increase its dominance in travel. For example, if a reader searches for ‘Country House Hotels in Scotland’ they will first see advertisements by online booking agencies such as Booking.com or Expedia which bid for these places and pay large amounts to Google for the privilege. These advertisements used to appear alongside search results. They are now at the top of the page which makes them doubly valuable. The next thing an internet browser will see is a list of Scottish hotels selected by Google. The basis on which these hotels are chosen is unclear. Do they pay a fee or is there some other criterion? If so, what is it? Google will, no doubt, respond by saying that its selected hotels are chosen by algorithm. But on what does it base its algorithm? Google is a specialist in search. It knows nothing about Scottish country house hotels apart from data filched from a variety of sources of dubious reliability such as TripAdvisor.

I believe that the only conclusion to draw from all of this is that Google is putting profit above its mission to provide the best customer experience. If it was really concerned to provide internet searchers with the most reliable information, the Guide’s offering: ‘Best Country House Hotels in Scotland’ would not be down the page but right at the top. Search Engine Land, a specialist search commentator, points out that Google is determined to extend its reach into travel as part of its aim to secure an increasing share of a lucrative advertising market. The strategy is paying off. Online paid-search competition is now so intense that hotels and hospitality brands bid for scarce slots and have to pay Google increasingly large sums to appear high up on its search results.

What can be done about this? It should not be left solely to the European Commissioner for Competition, Margrethe Vestager,  to prevent Google from acting as a ruthless monopolist. The failure of the American competition authorities to take action against Google is extraordinary. It is not just small companies that are being damaged, consumers also are being harmed. Google for its part should take pre-emptive action if it wants, as it surely must, to avoid further legal proceedings against it by the competition authorities.

To its credit, where its own business interests do not conflict, Google attempts to judge the worth of individual sites and rates them on the basis of their expertise, authority and trust. The more accurately that is done, and it is no easy task, the better its search results will be. The Good Hotel Guide has an interest in Google improving its performance because we believe that our 40 years of experience of picking hotels on the basis of reports from readers backed up by professional inspection qualifies us as a trusted source. Which is why we want Google to roll out its next search algorithm as soon as possible, one that will truly serve the consumer. It can and must do better.

We offered Google a right of reply to the criticisms in this article but they have failed to respond.