Google Lobbied by German Travel Companies to Delay Ad Bills

(Bloomberg) --

A group of German companies including Trivago, SoftBank Group Corp.-backed GetYourGuide and FlixBus have asked Google to postpone collecting bills for ads from companies that have received state aid.

Google should also offer refunds or credits for advertisements that sold products that customers can’t use anymore because of Covid-19 lockdowns, like vacations, eight German businesses said in a letter to Google Chief Business Officer Philipp Schindler.

“Unless greater flexibility is exercised by Google, many of its advertising partners will be forced to use government loans to pay their debts,” the companies said in the letter, which was sent to Bloomberg News. “Badly needed funding will flow into Google’s coffers on the backs of taxpayers.”

A representative for Alphabet Inc.’s Google said that the company is offering a financial support package and advertising credits for its small-and-medium sized customers.

“We’re committed to doing even more to help our users and our customers through this crisis, and are in continued communication with our partners, including the travel industry,” the company said in an emailed statement.

Alphabet this week reported an advertising slowdown in March and April. Ads account for the vast majority of the company’s revenue and large clients are slashing marketing costs. Chief Financial Officer Ruth Porat said she expects the second quarter to be “difficult.”

Companies in several industries have complained about Google’s search results for years. It’s increased the number of ads that appear at the top of many searches before users get to so-called natural results, forcing companies to devote a significant amount of money to compete for a top advertising spot that will direct customers to their websites.

Trivago lodged a complaint in 2015 against Google with the European Commission, the bloc’s antitrust regulator, that said the company was abusing its dominant position.

“By selectively enforcing strict payment terms on larger partners -- especially from the travel and transportation industry -- for its services provided to market those products, Google is opting out of sharing the responsibility to do right by customers,” the letter said.

©2020 Bloomberg L.P.

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