This is the sixth in our series of posts about search preference menus.
- The Q4 2020 results of Google’s search preference menu auction have been released and, as we predicted, DuckDuckGo has been eliminated in most countries.
- This EU antitrust remedy is only serving to further strengthen Google’s dominance in mobile search by boxing out alternative search engines that consumers want to use and, for those search engines that remain, taking most of their profits from the preference menu.
- The auction model is fundamentally flawed and must be replaced.
An Antitrust Remedy that Hurts Competition
As explained in this series, we believe search preference menus — ones that change all search defaults and include the most common Google alternatives — can enable consumers to easily express their search preferences and significantly increase competition in the search market. Our most recent large-sample user testing shows that when a search preference menu is designed properly, then Google’s search mobile market share could immediately drop by around 20% (with potentially greater market change shift over time).
However, Google’s current search preference menu in the EU is not properly designed, evidenced by the just released Q4 2020 auction results, listing which search engines will appear on the menu. DuckDuckGo, despite being the Google alternative that consumers most want to select, will no longer appear in most countries. As a result, many EU residents buying a new Android device will no longer have an easy way to adopt a private search engine.
The central problem with Google’s search preference menu is that it is a pay-to-play auction in which only the highest bidders are on the menu. This auction format incentivizes bidders to bid what they can expect to profit per user selection. The long-term result is that the participating Google alternatives must give most of their preference menu profits to Google! Google’s auction further incentivizes search engines to be worse on privacy, to increase ads, and to not donate to good causes, because, if they do those things, then they could afford to bid higher.
Why Was DuckDuckGo Eliminated?
Despite DuckDuckGo being robustly profitable since 2014, we have been priced out of this auction because we choose to not maximize our profits by exploiting our users. In practical terms, this means our commitment to privacy and a cleaner search experience translates into less money per search. This means we must bid less relative to other, profit-maximizing companies.
We predicted this outcome but chose to participate as long as we could since offering consumers an easy way to get simple privacy protection is more important than a boycott. We weren’t eliminated sooner for two reasons. First, prices were temporarily depressed due to less bidders because we believe not all eligible companies submitted the initial paperwork on time to participate in early rounds. Second, we didn't have adequate data on auction outcomes and how it impacted our business until this round. With this information, we bid what is long-term sustainable, and we were eliminated.
How to Make a Preference Menu that Works
There is a better way. Our series of posts on search preference menus explains in detail how to design one that actually empowers consumers and increases search competition. In our proposal, there is no auction. Alternative search engines with the most market share in each market are shown on the first screen, randomly ordered. The remaining alternative search engines are available by scrolling, also randomly ordered.
Our research shows that such a preference menu can be a great remedy. The European Commission should take action now and require Google to overhaul its preference menu design. The current remedy is not a remedy at all – it is fundamentally rigged by Google to benefit Google. The Commission has said they have been waiting on data to act: such data is now available. To expedite this process, we are sending the Commission our data that demonstrates exactly how the current process inevitably eliminates DuckDuckGo.