ACM sees risks associated with paid ranking for consumers and competition

In a study into paid ranking, the Netherlands Authority for Consumers and Markets (ACM) has found that paid ranking (or sponsored ranking) comes with risks for competition and consumers. Paid ranking involves providers paying extra in exchange for a higher position in search results on platforms. Consumers may be misled by the presented search results, if it is unclear that the ranking is influenced by payments. Moreover, it may restrict competition among providers. Transparency about paid results can help limit the risks of paid ranking, but that does call for requirements for how that would work in real life.

Martijn Snoep, Chairman of the Board of ACM, explains: “More and more platforms use paid ranking, but, in terms of prevalence, it is still a limited phenomenon. We conducted this study in order to identify the effects of paid ranking on consumers and businesses. Our next step is to examine what role transparency can play in mitigating the risks that we have identified. That study will result in drawing up requirements that need to be met. Clear transparency standards offer guidance for compliance.”

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