/https://specials-images.forbesimg.com/imageserve/5fce8686ca3972fb18dc722b/0x0.jpg?cropX1=0&cropX2=5259&cropY1=275&cropY2=3234&w=1200&resize=1200,675&ssl=1 "Google, Amazon, Microsoft Must Disclose How They Rank Search Results Under New EU Rules")
Topline
Google, Microsoft, Amazon and others will need to be more transparent in how they rank online search results under new European Union guidelines that go into effect on Monday, a move that will likely have an effect on the companies’ operations around the world as they are forced to open up parts of their closely guarded algorithmic black boxes.
EU Commissioner for A Europe Fit for the Digital Age and Executive Vice President Margrethe Vestager … [+]
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Key Facts
The guidelines laid out by the European Commission — the EU’s executive arm — require platforms to identify and disclose the parameters that determine the ranking of a search result.
The platforms will also have to clearly state when a featured result or higher ranking was paid for.
The impact of the move will likely not just be limited to Europe as similar parameters are used by the platforms to determine search results across the world.
The EU’s internal market commissioner Thierry Breton said that the guidelines will increase transparency, allow fair competition and will underpin the bloc’s forthcoming Digital Markets Act.
Crucial Quote
“These guidelines … will increase fairness in the online platform economy,” Margrethe Vestager, the EU’s competition commissioner Margrethe Vestager said in a statement. “Transparency is the European way to go,” she added noting that the bloc was also finalizing rules “for all digital services to cooperate with regulators and for the biggest platforms to provide more information on the way their algorithms work.”
Key Background
Various web services and merchants have complained that opaque search ranking algorithms from the likes of Google and Amazon have a significant impact on their businesses. Additionally, some have argued that search algorithms often favor competing products or services made by the search companies themselves. Last month, Amazon was charged with violating EU antitrust law for allegedly using data it collects from third-party sellers on the platform to compete against them, bringing into focus Amazon’s contentious dual role both as a retailer and as a marketplace for other vendors. Similarly, Google has faced multiple fines from EU regulators for favoring its own products in search results. Later this month, the European Commission led by Margrethe Vestager will outline the ambitious Digital Services Act (DSA) that will lay out a wide set of rules for tech giants that are likely to increase their responsibility in taking down harmful content and demand more transparency on algorithms used by them.
Big Number
$9.71 billion. That’s the approximate amount that Google has paid in fines to the EU between 2017 and 2019 for unfairly pushing its own products in search results over its competitors, Reuters reported.
Further Reading
EU sets out search ranking guidelines for Google, Microsoft, platforms (Reuters)
New EU Guidelines Ask Google, Digital Platforms To Disclose Search Ranking Criteria (Pymnts)
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