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March 9, 2021

Increased regulation could impact Google’s dominance in online travel

By GlobalData Travel & Tourism

A gradual shift in consumer and company sentiment towards gatekeeper platforms such as Google could result in increased regulation – and this should create a more level playing field in the online travel space.

Online travel companies have always relied on Google for visibility, and Google has always benefitted from advertising revenue, created by the likes of Expedia and Booking Holdings. However, this mutually beneficial relationship has started to deteriorate in recent years as travel companies have become increasingly concerned about Google’s advance into the online travel space.

Google can leverage further into online travel

Google is in an extremely strong position to continue strengthening its presence in online travel. As already seen, it can easily carry on with leveraging its core abilities, such as its wealth of data and colossal user base to potentially create an extremely uncompetitive market.

Because of this future scenario, 135 tech companies — including TripAdvisor, Booking.com and Trivago — wrote to the EU’s competition chief Margrethe Vestager in November 2020, asking her to end Google’s alleged favoring of its own services.

Antitrust suits looming

With the US Government having filed its long-expected antitrust suit against Google in October 2020, it is clear to see that Google’s dominance is becoming increasingly scrutinized across the globe. This scrutiny is also evident from the consumer point of view.

Big tech companies such as Google can be seen as reducing choice for users and stifling innovation. Additionally, the monetization of data has also led to privacy and misinformation issues, which has tarnished reputation.

According to 2020 findings from Pew Research Center, about half of Americans (47%) state that major tech companies should be regulated by the government more than they are now. This growing pressure from the consumer side could also help to push through regulation against Google in online travel.

Claims will be contested

Google will continue to contest claims of anti-competitive behavior in the online travel space. The company states that its users expect Google to give them the most relevant, high-quality search results that they can trust. Additionally, users are not forced in to using Google, they use this platform because it tends to provide the most time efficient service for consumers looking to book travel related services.

With mounting competitor, governmental and consumer pressure on Google’s search dominance, it is likely that more rules and regulations could be introduced to encourage competition based around innovation in online travel.

However, action against Google could take a considerable amount of time, and time is of the essence for travel companies who have been battered by the pandemic, which could increase frustration in the short-term.