Self-preferencing by firms with significant market power, particularly in the digital sector, threatens consumer welfare and market competition. This paper addresses the pervasive issue of self-preferencing, focusing on its manifestation within the Google Search Engine. Google's use of the PageRank algorithm has been critiqued since its 1998 inception for favoring its own products and services over those of third parties that operate on the platform, undermining competitive dynamics and democratic principles of the web.
With the European Commission's recent proceedings against Alphabet under the Digital Markets Act (DMA), this investigation aims to determine whether Google’s search results lead to self-preferencing, thereby ensuring fair treatment of third-party services. The primary goal is to analyze the treatment of self-preferencing in recent case laws and assess the effectiveness of regulatory frameworks like the DMA in mitigating such practices. To achieve this, the paper employs a mixed-methods approach, combining a review of legal cases, an analysis of the technical mechanisms of Google's search algorithms, and an evaluation of the regulatory responses under the DMA.
Findings indicate that while the DMA provides a structured approach to curbing self-preferencing, challenges remain, especially with ensuring compliance amidst the evolving integration of AI functionalities into search engines. Effective detection and enforcement mechanisms are crucial for the DMA to achieve its intended impact on market fairness and consumer welfare. Additionally, this paper offers guidance for digital gatekeepers on compliance with Article 6(5) DMA, addressing concerns related to platform envelopment strategies that negatively impact consumers and businesses.