Google says its top Shopping results are clearly labeled as sponsored by merchants

The top product results in Google's Shopping service frequently feature products with higher prices than those listed on competing online shopping services, according to a complaint filed by longtime Google critic Consumer Watchdog.

But Google said the top search results in its Shopping service are clearly labeled as sponsored by the retailers.

Consumer Watchdog, in the complaint filed Wednesday with the U.S. Federal Trade Commission, accuses Google of engaging in unfair and deceptive business practices.

"Most people likely expect [the Shopping results] to be Google's suggestions for best prices," the group said in its letter to the FTC. "However, if a person clicks on a pictured item, it takes them directly to the seller's website, although there is nothing to indicate it's an ad and that the seller pays Google and bids to be featured in Google Shopping."

A Google spokeswoman noted, however, that the sponsored product links are identified on the top right of every Google Shopping search result. "Merchant links are sponsored," says the message.

Then, if a user clicks on an icon, Google adds more information: "Google is compensated by these merchants. Payment is one of several factors used to rank these results."

Google Shopping also allows users to sort results by price.

"Our Shopping results are clearly labeled as sponsored," a Google spokeswoman said by email. "We've always worked to ensure that users can easily distinguish between paid and organic content on the Google search results page."

Consumer Watchdog made the complaint after putting out a study of Google Shopping results late last month. The group found that Google Shopping showed front-page results listing higher prices for eight of 14 products, compared to a competing shopping service. In some cases, the Google Shopping prices were significantly higher, the study found.

Another look at Google Shopping prices by FT.com produced similar results, said John Simpson, Consumer Watchdog's Privacy Project director.

The price issue is secondary to an issue of transparency, Simpson said in an email. "We believe that the featured items returned from Google Shopping on the main search page function as advertisements," he said. "Merchants in fact bid to be included, but none of this is at all clear to the user. It's even murkier when you realize that there are ads around the Google Shopping items which are clearly labeled as ads."

Grant Gross covers technology and telecom policy in the U.S. government for The IDG News Service. Follow Grant on Twitter at GrantGross. Grant's email address is [email protected].