Google: Your Payday Loan Dollars Are No Longer Welcome
Search engine market leader Google recently announced a global ban on payday lending ads. These lenders will no longer be able to advertise payday loans, short-term loans, title loans and high-interest loans with interest rates higher than 36 percent APR. Google claims that it’s bowing to pressure from consumer groups because these ads target low-income and poorly educated people who often get caught in cycles of debt, end up paying multiple fees for redeposited checks and pay interest rates that are too high. Acting in concert with the Consumer Protection Financial Bureau or CFPB, Google timed its announcement to complement the CFPB’s first steps in regulating the payday loan industry, which many people feel is a thinly disguised attempt to drive these lenders out of business.
Google regularly refuses to run ads for products that it considers too offensive or those that promote illegal products, services or activities such as gun and drug sales, counterfeit products and supplement scams. Google refused more than 780 million ads in 2015 according to the WashingtonPost.com1. However, the company has never issued a blanket ban against an entire industry. A spokesperson for the Online Lenders Alliance, President and CEO Lisa McGreevy, commented on the ban, “The policy discriminates against those among us who rely on online loans, especially the large number of Americans who cannot raise $2,000 in case of emergency.” Other critics of the action suggest that it’s unethical to collect millions of dollars in advertising fees and then cut the advertisers off when they haven’t taken any actions to deserve changes in policy.
If It Ain’t Broke, Don’t Fix It
Many critics claim that Google has made a tremendous miscalculation that could generate a severe backlash from the business community. After many years of insisting that it always remains neutral in organic searches, Google’s decision to ban an entire industry of advertisers calls the company’s neutrality into question. Google became a multibillion dollar juggernaut by remaining neutral, providing unbiased organic searches and improving searches to match what people want to find more accurately. If the system works–and it has earned Google billions–it doesn’t make sense to risk everything for philosophical principles that don’t get started to business.
The Dangers of Monopolies Such as Google Dictating Internet Search and Advertising Practices
Google’s actions should terrify any business owner who relies on paid-search advertising regardless of the industry. This is the first time that Google has banned a broad category of advertising, and as the largest and most reliable of the search engine companies, Google can dictate policy in such areas as search engine optimization ranking criteria because most people use Google when they’re searching for goods and services. Getting placed highly on the Search Engine Return Pages or SERPs is critical for many businesses because buyers only click on businesses near the top of the list, and some SERPs include millions of return listings in competitive categories.
Google enjoys a monopoly in conducting searches that has long worried the company’s critics and caused the EU to file an antitrust lawsuit. USNews.com2 reports that the European Commission uncovered evidence that Google abused its influence by pressuring companies to adopt its Android operating system, which is the basis of the lawsuit. Google is even more popular in Europe than the United States, and it manages 90 percent of all Internet searches there, which compares to a still-hefty 64 percent in the United States.
Google has received high marks for remaining neutral in organic searches and changing its ranking formulas to benefit average consumers with improved search results. Lately, however, the company has made some moves that give its advertisers clear advantages over organic SERPs. The company now lists its paid advertisers above and below SERPs, which makes them more visible on small screens. Mobile devices have overtaken computers as the devices of choice for Internet searches. Google is showing favoritism to its advertisers by cloaking its actions as designing more efficiently and making listings more mobile-friendly for small-screen users.
Google has the power to dictate who can advertise and how organic searches are ranked. Many consumer groups and businesses initially praised Google’s decision to ban payday loan ads, but these sycophants should be expressing horror at Google’s power. The first time is usually the hardest, so whom might Google ban next? Competitors like Apple, Facebook and others should rightfully be concerned. Both Google and the CFPB have more power than is healthy for free enterprise.
Google Already Enjoys Too Much Power and Should Remain Neutral
Google uses the Internet to display its own ads and links to advertisers from whom it earns a commission for every click. If the company abuses that process, it can damage the competition. Google’s decision to ban payday lending ads crosses the neutrality line and abuses the trust that people and businesses have placed in the company. If you want to learn more about Google and its advertising policies or the payday industry, visit us at the PersonalMoneyStore.com.