There are two points:
1. "Recode obtained an internal memo". If I were Google, I'd leak that on purpose. A polished internal memo that is leaked is more powerful than explicit PR, because of its supposed "internal" nature. "They didn't write it thinking others may read it, so it's probably honest and pure."
2. As I read, I thought exactly the same thing as your first paragraph: Search, making themselves look weak. I also remembered something Peter Thiel said in a PandoMonthly.. That non monopolistic companies try to look big and monopolistic, and that truly huge monopolistic companies downplay it to the point you worry about their survival.
He gave the example of Google, of course, and did the exact same thing as in the internal memo (talked about the other markets and how competition is so fierce, nothing is granted).
That was one of the best interviews I've seen, by the way..
The (current) EU charges only target Google Shopping and the placement of Googles own products in relation to competitors.
The point is that the issue that is relevant to whether or not their behaviour falls afoul of EU anti-trust rules is whether or not they have a monopoly position for search, and whether or not they are using such a monopoly position to expand their reach in the shopping space, not whether or not Google Shopping faces competition or currently does well.
If anything, the fact that Google Shopping faces stiff competition makes their alleged attempt to leverage their search position to expand its reach more serious, as there is an existing market they may hurt through anti-competitive practices.
When your search query has commercial intent, Google shows their own shopping-powered results at the top and if you click on one of those products, it goes DIRECTLY to the advertiser. Unless someone clicks on "shop for x product on Google" then it doesn't count in their traffic graph.
The "internal" nature of the memo makes this even more perplexing as the argument seems almost tailored to convince an external audience who may not understand search as well as people within Google do.
I think vidarh makes a great point about Google losing share to apps and vertical specific search engines and many people now go directly to Amazon when they start shopping or directly to Yelp when they want restaurant reviews or Tripadvisor for hotel reviews. Mobile is also changing user behavior (at least on iOS) where I rely a lot more on task-specific apps that I know and trust vs. searching for the details on Google.
Thanks, this is an interesting point. Search users fit into different profiles based on context. Marketers have known this for a while, as different keywords target users in research mode, ready-to-purchase mode, review mode, etc. Buyers searching for "best blue widgets" have different intent than "cheap blue widgets" or "buy Acme blue widgets".
Specific engines like Yelp, ebay, Amazon target users in specific contexts, but google targets general contexts. Why should Google avoid improving searches for specific queries if it has the technical ability to do so?
I suppose the question is, did Google overstep boundaries in the way it improved search results for specific contexts? Did Google violate antitrust laws by scraping content from these context-specific engines, then effectively saying "if you don't like it, we'll stop, but you can't use our search engine" (Yelp). [0]
[0] http://bit.ly/1ILbpMb (non-paywalled WSJ article via Google search, ironically enough)
It is not the consumers this anti-trust action is intended to protect, but those competitors of Google Shopping. The presumption of a lot of anti-trust law is that protecting competition is in the long term public interest that outweigh short term impact on consumers. Some anti-trust actions are motivated by direct consumer interest, but most is motivated by preventing anti-competitive practices by a monopolist from harming competitors.
If competitors of Google Shopping are treated fairly in terms of search results, and can buy the same kind of position that Google Shopping can (I don't think they can), then there would be no issue.
My point in terms of Amazon is not that Amazon search isn't different to Google - clearly they are, though they too have paid third party results on their pages.
My point is that to Google it's their search dominance they need to downplay, not the relatively market position of Google Shopping. Giving their own business preferential treatment is perfectly legal if they're not in a monopoly position. The moment they're found to have a monopoly position, a lot of forms of preferential treatment becomes illegal anti-competitive practices.
They can beat this in two ways: By convincing the EU or EU courts that they do not have a search monopoly, or convincing the EU that they are not giving Google Shopping preferential treatment. The latter I think would be extremely hard given how Google Shopping results are positioned.
The way they can not beat this is by talking about how there's a lot of competition in comparison shopping. If anything, that gives the EU Commission a stronger reason to act on allegations of anti-competitive behaviour, as it means there are Google competitors that may be harmed by any anti-competitive behaviour that might be occurring.
So, how is this not malicious altering of normal search results, so you can push out competition?
How about insurance? How about travel? How about google+ imposed on youtube? How about changing ToS of android for OEMs?
What the graphs show is that there are a number of strong competitors in the shopping space, which may create a strong public interest in ensuring Google is not being allowed to use it's perceived search monopoly position to muscle into the space and limit competition by giving itself better positions in results.
If the EU Commission finds that Google has a sufficient near monopoly on search and that their practices with respect to expanding their reach in shopping is anti-competitive, then Google's current weak position in shopping is entirely irrelevant unless they're hoping to show that being given such a prominent position in their search results does not give a business any advantages (their ad sales people ought to start hyperventilating if Google makes that argument).
And in fact the existence of a healthy, competitive eco-system in shopping would make any anti-competitive behaviour by a powerful monopolist far more damaging and important to curtail in the eyes of the EU Commission. It should not be something you'd want to draw attention to.
A much better argument would be to highlight far more the breadth of niche search engines, and how e.g. searches on Amazon and Ebay and others should also be included in any assessment of search market share, and that this would show that Google's market power is not as great as it would seem if you only look at "general purpose" search engines.