Breaking News >> DMA: Google's announcement and consequences
Google announced a few hours ago a very significant change to their vertical search solutions in three European markets.
From today and, for a 10 day period, users in Germany, Belgium & Estonia looking for hotels, flights or goods will no longer go via the immersive experience that combines availability, pricing and a combination of channels through which they can source their products or services.
For the hotel ecosystem this is a significant drawback, basically Google is going back about 15 to 20 years. As a result users will no longer be exposed to hotels in a map, with options for dates and their prices plus customer reviews featured in real time. Users will go back to ten blue links Google used for any kind of search at the turn of the century.
Why is this happening?
All of this is a direct consequence of the Digital Markets Act (DMA) application. The European Commission (EC) has been working for years on a law that aims to make the digital markets more fair, balanced and contestable. This initiative is obviously needed and welcomed by all the players in the European Union as it shall bring a fair context for all companies in the region, including the big platforms which have a relevant role in the European economies.
Some of these digital platforms have been designated gatekeepers due to their size, position and relevance.
Google was in the first batch of gatekeepers.
What does this mean for hotels?
Amongst the many platforms and subplatforms Google operates, one is particularly relevant for the hotel industry, this sub platform is known as Google Hotel Ads.
One of the key clauses applied to the designated gatekeepers is 6.5 of the DMA which, in short, prevents a gatekeepers platform from preferencing their own solutions vs third parties.
The way the EC is interpreting the 6.5 clause is that Google is self preferencing (providing better treatment= more visibility) to the Google Hotel Ads sub platform. The fact is that on Google Hotel Ads Google features hotels and intermediaries (OTAs) which can fulfill the user needs to book a hotel.
For the last 3 years, the intermediaries have been lobbying the EC to prevent Google from featuring travel vertical solutions (Google flights, Google Hotel Ads) ; it appears the DMA is their golden ticket to achieve this.
Google after applying significant changes to their product is still under investigation from EC who declared shortly after the changes were made as non complaint. Despite numerous attempts to accommodate and comply with the DMA it appears the EC is unwilling to provide guidance on how Google should interpret the DMA.
In this context Google, in order to assess the market impact the changes imposed by the EC may have in the hotel ecosystem, has taken the drastic measures referenced in their blog post.
This will only mean 2 things in Germany, Belgium & Estonia:
Worsened travel search experience for users and reduced options for booking hotels
Higher costs and OTA dependency for hotels
What will happen now?
Difficult to say. This situation has been going on for months and it seems Google is determined to dismantle their vertical search solutions due the deadlock with the EC due to the current DMA interpretation.
Most likely Google wants to avoid a hefty fine derived from this and is ready to shut down the vertical search services which has been developing and refining for decades.
Should that happen, users will be severely affected as their search experience will be significantly degraded and hotels (amongst other verticals) will lose a key direct distribution outlet and increase their dependency on intermediaries like the OTAs. In short this would be a catastrophe and the regulator (EC) would be the main culprit.
The European Union is supposed to be one of the most advanced & mature political systems in the world, always one step ahead in terms of regulation, in this case - should the DMA interpretation not be reconsidered - we will see how a well intentioned regulation will have the opposite effect to its original aim. Time will tell.
Love the detailed breakdown! Using kwrds.ai has really helped me fine-tune my keyword strategy and navigate these changes in search trends effectively. Thanks for sharing such insightful analysis!
This is an excellent analysis of the issue, thank you Javier Delgado Muerza The only thing I’d add is that I don’t *think* Google really wants the “ten blue links” solution. The richer experience has long been demonstrated to result in happier and returning users. I’d wager they don’t want to give that up.
Mobilität und Geschäftsreisen in der globalen Forschung, strategische Planung und eine reibungslose Umsetzung – für einen effizienten und erfolgreichen Ablauf.
4wHabe ich das richtig verstanden? Mit dem neuen Digital Markets Act (DMA) können Hotels ihre Preise frei gestalten, ohne Einschränkungen durch Buchungsplattformen, und erhalten bessere Sichtbarkeit sowie Zugang zu Kundendaten. Gleichzeitig bedeutet das doch aber auch, dass sie mehr Eigeninitiative im Marketing und Vertrieb zeigen, Kundendaten effizienter verwalten und Preise über mehrere Kanäle koordinieren müssen. Ist das so korrekt?
Founder & CEO at BookDirect.com
4wThis change only affects Google's SERPs, which primarily reflect brand keyword searches, while the main driver of incremental traffic for hotels, destination based searches via Google Maps, remains largely unaffected (apart from some click-through traffic lost from Google Search). Although Google no longer shares this data, it's estimated that only 15 to 30% of conversions coming from SERPs to hotels represent destination based searches, while just 10 to 20% of Maps traffic represent property keyword searches (mostly for navigational purposes), though this mix is different for OTAs (they see around 70% from destination searches and 30% from property keywords). Google's promotion of its Maps and Metasearch products in Search is not good for consumers or hotels, and they ought to pull back their anti-competitive practises more, lest the EC push forward even more, with the FTC following suite.