1) The document discusses allegations that Google has manipulated its organic search results to favor its own services over competitors', potentially violating antitrust laws.
2) It focuses on analyzing the arguments made in white papers by FairSearch, an industry group critical of Google. FairSearch alleges Google has monopoly power in search and search advertising and has used that power to favor its own competing services like Google Maps in organic search results.
3) The document aims to rigorously analyze the relevant antitrust markets implicated by such allegations and determine if Google's practices could harm competition, as any antitrust claims would require defining relevant markets.
The editorial discusses the third iteration of Google's proposed commitments to the European Commission to address antitrust concerns regarding Google's online search and advertising business. It summarizes that the Commission's preliminary concerns relate specifically to favorable display of links within Google search results to its own specialized search services. The commitments aim to remedy this by providing users with informed choice through labeling and separating such links and displaying links to three rival specialized search services. The editorial argues that the revised commitments go beyond what is legally required to address the Commission's stated concerns and provide significant additional opportunities for promotion of rival sites on Google.
4. let’s talk about android – observations on competition in the field of mo...Matias González Muñoz
This document discusses competition concerns regarding Google's Android mobile operating system. It summarizes investigations by competition authorities in the US, South Korea, and Europe into allegations that Google has abused its dominant position. The US FTC and South Korean FTC found no antitrust violations, but the European Commission is still investigating complaints from Google competitors. The document analyzes these allegations under EU competition law and argues the complaints lack merit.
8. the appropriate legal standard and sufficient economic evidence for exclu...Matias González Muñoz
This document summarizes a paper analyzing the legal standard and economic evidence used in the FTC's case against McWane regarding exclusive dealing. It discusses the dissenting opinion of Commissioner Wright, who argued for a heightened legal standard requiring "clear evidence" of harm to competition. The authors argue this standard is too high and could lead to under-enforcement. They also analyze the economic theories of harm from exclusive dealing and the evidence presented in the case. The authors conclude Commissioner Wright's proposed standard is not appropriate and would weaken antitrust enforcement.
This document discusses potential competition law issues regarding social media platforms, focusing on Facebook. It begins by providing context on competition law cases in the IT sector, noting Facebook has not faced antitrust scrutiny yet. It then summarizes the rise of social media and Facebook's dominance in the field. The document outlines how market definition is complicated for social media by its two-sided nature. It proposes adapting the SSNIP test to evaluate quality over price for free services. The analysis will then identify if Facebook holds a dominant position and potential exploitative or exclusionary abuses of that position under EU competition law.
The document discusses potential antitrust investigations of Google's Android licensing practices in the US and EU. It predicts that the European Commission will find Google's practices anti-competitive and in violation of EU antitrust laws due to predatory pricing and illegal bundling. However, the FTC is predicted to take a more lenient view, weighing the pro-competitive benefits of Android's open-source licensing while still requiring measures to ensure fair competition.
This document discusses predicting antitrust enforcement against Google's Android licensing practices in the US and EU based on past cases. It argues the EU will likely find the free Android licensing anti-competitive and Google's bundling of services an abuse of dominance. The US FTC will weigh Android's benefits and may require measures to ensure fair competition. The document analyzes differences in US and EU antitrust law and enforcement through cases on Google search and Microsoft Windows.
Del Percio 2011 Greenbuild Legal Forum Presentation - FTC Green GuidesStephen Del Percio
This presentation analyzes the recent changes to the FTC Green Guides in the context of marketing green buildings and real estate, using images of actual green building projects to suggest best practices for owners and operators.
In most jurisdictions, antitrust fines are based on affected commerce rather than on collusive profits, and in some others, caps on fines are introduced based on total firm sales rather than on affected commerce. We uncover a number of distortions that these policies generate, propose simple models to characterize their comparative static properties, and quantify them with simulations based on market data. We conclude by discussing the obvious need to depart from these distortive rules-of-thumb that appear to have the potential to substantially reduce social welfare.
The editorial discusses the third iteration of Google's proposed commitments to the European Commission to address antitrust concerns regarding Google's online search and advertising business. It summarizes that the Commission's preliminary concerns relate specifically to favorable display of links within Google search results to its own specialized search services. The commitments aim to remedy this by providing users with informed choice through labeling and separating such links and displaying links to three rival specialized search services. The editorial argues that the revised commitments go beyond what is legally required to address the Commission's stated concerns and provide significant additional opportunities for promotion of rival sites on Google.
4. let’s talk about android – observations on competition in the field of mo...Matias González Muñoz
This document discusses competition concerns regarding Google's Android mobile operating system. It summarizes investigations by competition authorities in the US, South Korea, and Europe into allegations that Google has abused its dominant position. The US FTC and South Korean FTC found no antitrust violations, but the European Commission is still investigating complaints from Google competitors. The document analyzes these allegations under EU competition law and argues the complaints lack merit.
8. the appropriate legal standard and sufficient economic evidence for exclu...Matias González Muñoz
This document summarizes a paper analyzing the legal standard and economic evidence used in the FTC's case against McWane regarding exclusive dealing. It discusses the dissenting opinion of Commissioner Wright, who argued for a heightened legal standard requiring "clear evidence" of harm to competition. The authors argue this standard is too high and could lead to under-enforcement. They also analyze the economic theories of harm from exclusive dealing and the evidence presented in the case. The authors conclude Commissioner Wright's proposed standard is not appropriate and would weaken antitrust enforcement.
This document discusses potential competition law issues regarding social media platforms, focusing on Facebook. It begins by providing context on competition law cases in the IT sector, noting Facebook has not faced antitrust scrutiny yet. It then summarizes the rise of social media and Facebook's dominance in the field. The document outlines how market definition is complicated for social media by its two-sided nature. It proposes adapting the SSNIP test to evaluate quality over price for free services. The analysis will then identify if Facebook holds a dominant position and potential exploitative or exclusionary abuses of that position under EU competition law.
The document discusses potential antitrust investigations of Google's Android licensing practices in the US and EU. It predicts that the European Commission will find Google's practices anti-competitive and in violation of EU antitrust laws due to predatory pricing and illegal bundling. However, the FTC is predicted to take a more lenient view, weighing the pro-competitive benefits of Android's open-source licensing while still requiring measures to ensure fair competition.
This document discusses predicting antitrust enforcement against Google's Android licensing practices in the US and EU based on past cases. It argues the EU will likely find the free Android licensing anti-competitive and Google's bundling of services an abuse of dominance. The US FTC will weigh Android's benefits and may require measures to ensure fair competition. The document analyzes differences in US and EU antitrust law and enforcement through cases on Google search and Microsoft Windows.
Del Percio 2011 Greenbuild Legal Forum Presentation - FTC Green GuidesStephen Del Percio
This presentation analyzes the recent changes to the FTC Green Guides in the context of marketing green buildings and real estate, using images of actual green building projects to suggest best practices for owners and operators.
In most jurisdictions, antitrust fines are based on affected commerce rather than on collusive profits, and in some others, caps on fines are introduced based on total firm sales rather than on affected commerce. We uncover a number of distortions that these policies generate, propose simple models to characterize their comparative static properties, and quantify them with simulations based on market data. We conclude by discussing the obvious need to depart from these distortive rules-of-thumb that appear to have the potential to substantially reduce social welfare.
Trademark issues in PPC search marketing in the UKMike Teasdale
My presentation for Search Engine Strategies, 17 Feb 2009, London.
This is a short guide to the current state of play around trademark protection and search marketing in the UK, including a brief summary of some current legal cases in the UK and Europe.
EU Competition Policy vs. US Antitrust in Abuse of a Dominant PositionRCELLUCCI
The document compares dominant position policies in the EU and US. The EU policy under Article 82 is more stringent and explicitly places responsibility on dominant firms to not distort competition. The two policies differ most in their approaches to refusal to deal cases and exclusionary practices cases. While the US prioritizes firm autonomy and avoiding false positives, the EU is more willing to intervene to ensure market contestability, especially in network markets.
This paper estimates the impact of competition policy on total factor productivity growth for 22 industries in twelve OECD countries over 1995 to 2005. We find a positive and significant effect of competition policy as measured by created indexes. We provide results based on instrumental variables estimators and heterogeneous effects to support the causal nature of the established link. The effect is particularly strong for specific aspects of competition policy related to its institutional setup and antitrust activities. It is also strengthened by good legal systems, suggesting complementarities between competition policy and the efficiency of law enforcement institutions.
Antitrust Policy: A Century of Economic and Legal ThinkingGus Agosto
This presentation follows the evolution of thinking about competition since the passage of the Sherman Act in 1890 as reflected by major antitrust decisions and research in industrial organization. It divide the U.S. antitrust experience into five periods and discuss each period's legal trends and economic thinking in three core areas of antitrust: cartels, cooperation, or other interactions among independent firms; abusive conduct by dominant firms; and mergers.
This document analyzes the consumer electronics industry using Porter's Five Forces model. It finds that the threat of new entrants is high due to the capital intensive nature of opening stores and established brands. The bargaining power of suppliers is also high given major suppliers account for most of the largest retailer's merchandise and have alternative distribution options. Additionally, the bargaining power of buyers has increased as e-commerce allows for price transparency and low switching costs. Substitutes like online retailers and other big box stores carrying electronics provide alternatives. Finally, rivalry in the industry is intense as competitors match prices aggressively and introduce new programs to attract customers.
The Fourth Annual Global Mobility Study [hyperlink] by L.E.K. Consulting, Vision Mobility and CuriosityCX highlights that there is a much greater uptake of ride-hailing and other new mobility options in India and China than in mature western economies. With relatively low levels of car ownership and less developed public transport systems in these Asian countries, new mobility use is now comparable with and set to overtake traditional transport for a segment of the population.
Leniency policies offering immunity to the first cartel member that blows the whistle and self-reports to the antitrust authority have become the main instrument in the fight against cartels around the world. In public procurement markets, however, bid-rigging schemes are often accompanied by corruption of public officials. In the absence of coordinated forms of leniency for unveiling corruption, a policy offering immunity from antitrust sanctions may not be sufficient to encourage wrongdoers to blow the whistle, as the leniency recipient will then be exposed to the risk of conviction for corruption. Explicitly introducing leniency policies for corruption, as has been recently done in Brazil and Mexico, is only a first step. To increase the effectiveness of leniency in multiple offense cases, we suggest, besides extending automatic leniency to individual criminal sanctions, the creation of a ‘one-stop-point’ enabling firms and individuals to report different crimes simultaneously and receive leniency for all of them at once if they are entitled to it.
Eu antitrust case against google involving android in 2018 is being appealed ...aditi agarwal
Google is heading to a top European Union court Monday to attraction a report EU antitrust penalty imposed for stifling competition thru the dominance of its Android working gadget
This presentation by Helen JENKINS, Managing Partner of OXERA was made during the discussion on “Market study methodologies for competition authorities” held at the 125th meeting of the OECD Working Party No. 3 on Co-operation and Enforcement on 20 June 2017. More papers and presentations on the topic can be found out at oe.cd/1ZX.
This document summarizes key topics in online marketing and advertising law. It discusses what constitutes advertising, standards that apply like being truthful and not misleading, issues around disclosures, and areas of emerging regulatory focus such as behavioral targeting, affiliate marketing liability, and use of trademarks in keyword advertising. Regulators aim to protect consumers through guidance, rulemaking, and enforcement while balancing business interests.
Microsoft faced antitrust lawsuits in the late 1990s and early 2000s due to its dominance in the personal computer software market. The U.S. Department of Justice and several state attorneys general alleged that Microsoft abused monopoly power in operating systems and browsers. A trial court found that Microsoft held a monopoly and violated antitrust laws. The case resulted in a settlement requiring Microsoft to share application programming interfaces with competitors and allow more customer choice.
There are four main types of market structures: perfect competition, monopolistic competition, oligopoly, and monopoly. Perfect competition is rare and involves thousands of small firms and buyers, completely standardized products, no single firm controls price, and easy entry and exit into the market. A monopoly involves a single firm, unique products where the firm controls price, and high barriers to entry.
This document discusses antitrust policy and competition law. It provides definitions of antitrust law, outlines its three main elements which are prohibiting anti-competitive agreements, banning abusive behavior by dominant firms, and supervising large mergers. It also discusses objectives of antitrust policy, anti-competitive practices, federal antitrust laws in the US and India's Competition Act. Specific cases involving Microsoft, Standard Oil, IBM, and AT&T are analyzed. The document also summarizes criticisms of antitrust laws.
This presentation by Russian Federation was prepared for the break-out Session 1, “Quantitative Evidence”, in the discussion “Economic Analysis in Merger Investigations” at the 19th OECD Global Forum on Competition on 9 December 2020. More papers and presentations on the topic can be found at http://oe.cd/eami.
This presentation was uploaded with the author’s consent.
Este documento presenta una serie de indicaciones propuestas por la Presidenta de la República a un proyecto de ley en discusión en la Cámara de Diputados. Las indicaciones proponen modificaciones al proyecto de ley, como agregar y modificar artículos, para ampliar y precisar el alcance de la legislación y fortalecer las facultades de los organismos encargados de velar por la libre competencia. En total se proponen 10 indicaciones con distintos puntos y letras para introducir cambios al proyecto de ley.
El colegio de abogados de Chile presento sus comentarios a la reforma del DLL211. Este organismo gremial compuesto por abogados en busca de un desarrollo ético y correcto de sus miembros.
Màs información en http://www.colegioabogados.cl/
o www.lcuc.cl
Fallo del cuarto Tribunal Oral en lo Penal de Santiago, que resuelve el delito de colusión absolviendo a 10 de los imputados administradores de farmacias.
FNE entrega informe sobre efectos del monopolio de Transbank al TDLCMatias González Muñoz
El documento habla sobre la importancia de la privacidad y la seguridad en línea en la era digital. Explica que los usuarios deben tomar medidas para proteger su información personal, como usar contraseñas seguras y software antivirus actualizado. También enfatiza que las empresas deben implementar medidas de seguridad sólidas para proteger los datos de los clientes.
10. the judgment of the eu general court in intel and the so-called ’more ec...Matias González Muñoz
This document discusses the EU General Court's 2014 judgment in the Intel case and whether the EU case law on exclusivity rebates by dominant companies is economically sound. It argues that the EU case law is based on valid economic principles and categorization, and that criticism of the case law as not being "effects-based" is unfounded. The document also analyzes why the "as efficient competitor" test proposed as an alternative approach is not appropriate for assessing legality under Article 102 of the EU Treaty.
Trademark issues in PPC search marketing in the UKMike Teasdale
My presentation for Search Engine Strategies, 17 Feb 2009, London.
This is a short guide to the current state of play around trademark protection and search marketing in the UK, including a brief summary of some current legal cases in the UK and Europe.
EU Competition Policy vs. US Antitrust in Abuse of a Dominant PositionRCELLUCCI
The document compares dominant position policies in the EU and US. The EU policy under Article 82 is more stringent and explicitly places responsibility on dominant firms to not distort competition. The two policies differ most in their approaches to refusal to deal cases and exclusionary practices cases. While the US prioritizes firm autonomy and avoiding false positives, the EU is more willing to intervene to ensure market contestability, especially in network markets.
This paper estimates the impact of competition policy on total factor productivity growth for 22 industries in twelve OECD countries over 1995 to 2005. We find a positive and significant effect of competition policy as measured by created indexes. We provide results based on instrumental variables estimators and heterogeneous effects to support the causal nature of the established link. The effect is particularly strong for specific aspects of competition policy related to its institutional setup and antitrust activities. It is also strengthened by good legal systems, suggesting complementarities between competition policy and the efficiency of law enforcement institutions.
Antitrust Policy: A Century of Economic and Legal ThinkingGus Agosto
This presentation follows the evolution of thinking about competition since the passage of the Sherman Act in 1890 as reflected by major antitrust decisions and research in industrial organization. It divide the U.S. antitrust experience into five periods and discuss each period's legal trends and economic thinking in three core areas of antitrust: cartels, cooperation, or other interactions among independent firms; abusive conduct by dominant firms; and mergers.
This document analyzes the consumer electronics industry using Porter's Five Forces model. It finds that the threat of new entrants is high due to the capital intensive nature of opening stores and established brands. The bargaining power of suppliers is also high given major suppliers account for most of the largest retailer's merchandise and have alternative distribution options. Additionally, the bargaining power of buyers has increased as e-commerce allows for price transparency and low switching costs. Substitutes like online retailers and other big box stores carrying electronics provide alternatives. Finally, rivalry in the industry is intense as competitors match prices aggressively and introduce new programs to attract customers.
The Fourth Annual Global Mobility Study [hyperlink] by L.E.K. Consulting, Vision Mobility and CuriosityCX highlights that there is a much greater uptake of ride-hailing and other new mobility options in India and China than in mature western economies. With relatively low levels of car ownership and less developed public transport systems in these Asian countries, new mobility use is now comparable with and set to overtake traditional transport for a segment of the population.
Leniency policies offering immunity to the first cartel member that blows the whistle and self-reports to the antitrust authority have become the main instrument in the fight against cartels around the world. In public procurement markets, however, bid-rigging schemes are often accompanied by corruption of public officials. In the absence of coordinated forms of leniency for unveiling corruption, a policy offering immunity from antitrust sanctions may not be sufficient to encourage wrongdoers to blow the whistle, as the leniency recipient will then be exposed to the risk of conviction for corruption. Explicitly introducing leniency policies for corruption, as has been recently done in Brazil and Mexico, is only a first step. To increase the effectiveness of leniency in multiple offense cases, we suggest, besides extending automatic leniency to individual criminal sanctions, the creation of a ‘one-stop-point’ enabling firms and individuals to report different crimes simultaneously and receive leniency for all of them at once if they are entitled to it.
Eu antitrust case against google involving android in 2018 is being appealed ...aditi agarwal
Google is heading to a top European Union court Monday to attraction a report EU antitrust penalty imposed for stifling competition thru the dominance of its Android working gadget
This presentation by Helen JENKINS, Managing Partner of OXERA was made during the discussion on “Market study methodologies for competition authorities” held at the 125th meeting of the OECD Working Party No. 3 on Co-operation and Enforcement on 20 June 2017. More papers and presentations on the topic can be found out at oe.cd/1ZX.
This document summarizes key topics in online marketing and advertising law. It discusses what constitutes advertising, standards that apply like being truthful and not misleading, issues around disclosures, and areas of emerging regulatory focus such as behavioral targeting, affiliate marketing liability, and use of trademarks in keyword advertising. Regulators aim to protect consumers through guidance, rulemaking, and enforcement while balancing business interests.
Microsoft faced antitrust lawsuits in the late 1990s and early 2000s due to its dominance in the personal computer software market. The U.S. Department of Justice and several state attorneys general alleged that Microsoft abused monopoly power in operating systems and browsers. A trial court found that Microsoft held a monopoly and violated antitrust laws. The case resulted in a settlement requiring Microsoft to share application programming interfaces with competitors and allow more customer choice.
There are four main types of market structures: perfect competition, monopolistic competition, oligopoly, and monopoly. Perfect competition is rare and involves thousands of small firms and buyers, completely standardized products, no single firm controls price, and easy entry and exit into the market. A monopoly involves a single firm, unique products where the firm controls price, and high barriers to entry.
This document discusses antitrust policy and competition law. It provides definitions of antitrust law, outlines its three main elements which are prohibiting anti-competitive agreements, banning abusive behavior by dominant firms, and supervising large mergers. It also discusses objectives of antitrust policy, anti-competitive practices, federal antitrust laws in the US and India's Competition Act. Specific cases involving Microsoft, Standard Oil, IBM, and AT&T are analyzed. The document also summarizes criticisms of antitrust laws.
This presentation by Russian Federation was prepared for the break-out Session 1, “Quantitative Evidence”, in the discussion “Economic Analysis in Merger Investigations” at the 19th OECD Global Forum on Competition on 9 December 2020. More papers and presentations on the topic can be found at http://oe.cd/eami.
This presentation was uploaded with the author’s consent.
Este documento presenta una serie de indicaciones propuestas por la Presidenta de la República a un proyecto de ley en discusión en la Cámara de Diputados. Las indicaciones proponen modificaciones al proyecto de ley, como agregar y modificar artículos, para ampliar y precisar el alcance de la legislación y fortalecer las facultades de los organismos encargados de velar por la libre competencia. En total se proponen 10 indicaciones con distintos puntos y letras para introducir cambios al proyecto de ley.
El colegio de abogados de Chile presento sus comentarios a la reforma del DLL211. Este organismo gremial compuesto por abogados en busca de un desarrollo ético y correcto de sus miembros.
Màs información en http://www.colegioabogados.cl/
o www.lcuc.cl
Fallo del cuarto Tribunal Oral en lo Penal de Santiago, que resuelve el delito de colusión absolviendo a 10 de los imputados administradores de farmacias.
FNE entrega informe sobre efectos del monopolio de Transbank al TDLCMatias González Muñoz
El documento habla sobre la importancia de la privacidad y la seguridad en línea en la era digital. Explica que los usuarios deben tomar medidas para proteger su información personal, como usar contraseñas seguras y software antivirus actualizado. También enfatiza que las empresas deben implementar medidas de seguridad sólidas para proteger los datos de los clientes.
10. the judgment of the eu general court in intel and the so-called ’more ec...Matias González Muñoz
This document discusses the EU General Court's 2014 judgment in the Intel case and whether the EU case law on exclusivity rebates by dominant companies is economically sound. It argues that the EU case law is based on valid economic principles and categorization, and that criticism of the case law as not being "effects-based" is unfounded. The document also analyzes why the "as efficient competitor" test proposed as an alternative approach is not appropriate for assessing legality under Article 102 of the EU Treaty.
This document discusses Most Favoured Nation (MFN) clauses, which originated in international trade agreements. It describes the potential pro-competitive and anti-competitive effects of MFN clauses, noting they can limit price discrimination and transaction costs but may also reduce incentives to lower prices. The assessment of MFN clauses is fact-specific and dependent on the market position of parties and characteristics of the market. Recent EU cases involving MFN clauses in the hotel and e-books sectors are also mentioned.
El documento describe un requerimiento de la Fiscalía Nacional Económica (FNE) contra tres grandes empresas productoras de pollo (Ariztía, Agrosuper y Don Pollo) y su asociación (APA), acusándolas de colusión para limitar la producción y asignarse cuotas de mercado. La FNE argumenta que estas empresas, que controlan más del 90% del mercado, han coordinado sus acciones a través de la APA desde 1995 para fijar cuotas de producción anuales con el fin de restringir la competencia. Se solic
Este documento presenta la respuesta de WOM S.A. a la demanda presentada por Telefónica Móviles Chile S.A. por supuesta infracción a la ley de competencia desleal. WOM S.A. argumenta que 1) no es competencia real de Movistar dado su bajo porcentaje de participación en el mercado, 2) la publicidad cuestionada utiliza una expresión común y su contenido es lícito, y 3) la demanda carece de fundamento ya que la publicidad no ridiculiza ni denosta a Movistar ni menoscaba su reput
6. price squeezes with positive margins in eu competition law. economic and ...Matias González Muñoz
This document summarizes and critiques the positive margin squeeze theory established in the TeliaSonera case law. It argues the theory is flawed on both economic and legal grounds. Through a numerical bakery example, it shows that any wholesale input price above marginal cost but allowing the competitor a positive margin cannot yield exclusionary effects, as the competitor can remain profitable, save profits, and eventually invest to become vertically integrated. It concludes the sole rationale for intervening in such cases is that the input price makes the competitor's life comparatively more difficult, but any price will have this effect, so the input price is causally irrelevant. The positive margin squeeze theory is an economic and legal "zombie" that can be disregarded.
La Unión Europea ha acordado un embargo petrolero contra Rusia en respuesta a la invasión de Ucrania. El embargo prohibirá las importaciones marítimas de petróleo ruso a la UE y pondrá fin a las entregas a través de oleoductos dentro de seis meses. Esta medida forma parte de un sexto paquete de sanciones de la UE destinadas a aumentar la presión económica sobre Moscú y privar al Kremlin de fondos para financiar su guerra.
Este documento resume la segunda parte de un trabajo sobre si existe un derecho del consumidor en Chile. Analiza las disposiciones especiales de la Ley N° 19.496 relacionadas con información, publicidad, crédito al consumidor y seguridad de productos. También comenta las normas sobre protección del consumidor de servicios financieros y los procedimientos establecidos en la ley. El autor critica la "sobrerregulación" de la ley y su intento de someter a los proveedores a los intereses de los consumidores más que equilibrar ambas posic
14. se debe sancionar la fijación unilateral de precios excesivos. t. menchacaMatias González Muñoz
Este documento analiza si los organismos de defensa de la libre competencia pueden sancionar la fijación unilateral de precios excesivos por parte de empresas. Examina cómo funciona un mercado libre y los riesgos de permitir que una autoridad determine precios "abusivos". También estudia el tratamiento de este tema en derecho estadounidense y europeo. Finalmente, revisa el concepto de "precio justo" y su relación con posibles soluciones al problema, a la luz de la filosofía y la ley chilena.
Este documento analiza críticamente el aumento en el número de superintendencias en Chile y plantea posibles problemas desde una perspectiva constitucional y regulatoria. Explica que actualmente existen 9 superintendencias que supervisan sectores como servicios públicos, seguridad social y mercado de capitales. También menciona propuestas para crear nuevas superintendencias. El autor argumenta que las superintendencias podrían ejercer poderes públicos que no se ajustan a la Constitución y afectar derechos fundamentales.
Este documento discute la importancia del principio "pacta sunt servanda" en el derecho. Explica que este principio es fundamental para el sistema jurídico ya que permite que los individuos puedan crear sus propias reglas de conducta a través de acuerdos voluntarios. También describe cómo las normas generales se singularizan a través de reglas específicas como sentencias judiciales, actos administrativos y contratos privados, permitiendo que los individuos tengan un papel activo en darse su propio derecho. Finalmente, enfatiza la importancia
Este documento resume la tercera parte de un trabajo sobre la existencia de un derecho del consumidor. Describe el llamado "sello SERNAC", el cual la ley le otorga importancia pero que adolece de deficiencias. También examina la estructura orgánica del Servicio Nacional del Consumidor y modificaciones propuestas a la ley. Finalmente, destaca la "destrucción premeditada de principios jurídicos fundamentales" sobre los que se intenta fundamentar un nuevo derecho del consumidor.
1) El documento discute los derechos del consumidor como derechos humanos fundamentales. 2) Explica que los derechos del consumidor no deben verse como una preocupación de clase media o como una protección simplista, sino como un vehículo de protección general vinculado a derechos elementales de las personas. 3) También analiza la posición vulnerable del consumidor frente a empresas y la necesidad de regular para corregir desequilibrios a través de la ley y promover consumidores informados y participativos.
Google search bias letter 2016 01-26(1)-1Greg Sterling
The letter summarizes recent developments regarding investigations into Google's search practices that may warrant revisiting the FTC's previous decision to close its investigation. Specifically, it notes that international regulators like the European Commission have opened antitrust cases against Google and found evidence of search result manipulation. Additionally, new research studies have found that Google's promotion of its own content can degrade search quality and harm consumers by providing less relevant results. As such, the attorneys general encourage the FTC to consider this new information as the issue of fairness in local search continues to evolve.
The letter summarizes recent developments regarding investigations into Google's search practices that may warrant revisiting the FTC's previous decision to close its investigation. Specifically, it notes that international regulators like the European Commission have opened antitrust cases against Google and found evidence of search result manipulation. Additionally, new research studies have found that Google's promotion of its own content can degrade search quality and harm consumers by providing less relevant results. As such, the attorneys general encourage the FTC to consider this new information as the issue of fairness in local search continues to evolve.
This document discusses proposed remedies for alleged search bias by Google that have been put forward by Google's competitors. It analyzes five categories of proposed remedies: (1) search neutrality, which would have courts evaluate and reject algorithm changes to Google Search; (2) limiting Google to only providing 10 blue links instead of other types of answers; (3) limiting Google's ability to crawl and use content from other sites; (4) prohibiting Google from acquiring companies or forming exclusive partnerships; and (5) requiring continuous disclosures from Google. The document argues that these proposed remedies would be unworkable and harm consumers, competition, and innovation by inviting excessive government intervention in Google's business and product design decisions. It concludes that
This document analyzes Google's market dominance in three areas: structure, conduct, and performance. In terms of structure, Google dominates its markets to such an extent that rivals face significant barriers to entry. In terms of conduct, Google has faced allegations of privacy breaches, advertising illegal products, and manipulating search results to favor its own sites. In terms of performance, Google is highly profitable but these profits do not encourage new competition. The document finds Google's search results are statistically more likely to reference itself and less likely to reference competitors, warranting further antitrust investigation.
This document is a complaint filed by the United States and 11 states against Google LLC alleging antitrust violations. It claims that Google has unlawfully maintained monopolies in general search services, search advertising, and general search text advertising through anticompetitive practices such as exclusionary agreements with device manufacturers, browsers, and wireless carriers that make Google the preset default search engine on devices and browsers. This locks up the distribution channels and blocks rivals, giving Google a search monopoly responsible for around 90% of general search engine queries in the US. The complaint argues these practices violate antitrust law and deny rivals the scale needed to compete effectively in these markets unless remedied by the court.
130717 expert report of david franklyn and david hymanGreg Sterling
The survey tested the impact of Google's proposed commitments to resolve antitrust charges by providing more prominent placement for competitors' websites and labels indicating Google's services. The survey found:
1) A trivial number of respondents clicked on the "three rival links" proposed by Google, indicating this remedy would not draw consumer attention to rivals or increase competition.
2) Many respondents were confused or misled by Google's proposed labels, suggesting the labels would increase rather than decrease consumer confusion about search results.
3) Minor changes to page layout are unlikely to change existing competitive dynamics in search, while more significant changes that comparably display rivals could impact competition for clicks.
This document summarizes a study examining the impact of mergers and acquisitions on research and development (R&D) intensity within high-tech industries from 1990-2014. The study uses an event study methodology to analyze stock price reactions around merger announcements. Key findings include:
1) 31.1% of acquiring firms saw positive abnormal stock returns around announcements, while 69% saw negative returns, surprisingly indicating investor pessimism about mergers.
2) 91.3% of target firms saw positive abnormal returns, as expected given they were being acquired.
3) The study aims to determine if event studies can help antitrust agencies evaluate potential pro-competitive or anti-competitive effects of mergers in innovative sectors
Google antitrust-matter-expert-report-of-profs-franklyn-and-hyman-2013 12-09-...Greg Sterling
The document summarizes the findings of surveys conducted by experts Franklyn and Hyman regarding Google's proposed Second Commitments to address European Commission concerns about limiting choice in search results. The surveys found:
1) Google accounts for the vast majority (over 90%) of searches for products and hotels. 2) The three rival links proposed by Google received very few clicks (under 3% for products, under 4% for hotels) compared to clicks on Google Shopping/Hotels (over 30%). 3) On mobile searches, there were essentially no clicks on the rival links, with nearly all clicks going to Google Shopping/Hotels.
Data monopolists like google are threatening the economy hbrankiteny
Big data holds risks beyond threats to consumer privacy, including threats to free market competition from data monopolies. As companies build proprietary data sets and use them to create new products and markets, data becomes an unfair barrier to entry that prevents new competitors. This hurts competition and the economy. The search market provides an example where Google's vast historical search data gives it an insurmountable advantage over competitors. Regulators should consider whether a company's exclusive ownership of certain data that blocks market entry constitutes a monopoly problem requiring antitrust intervention, similar to Standard Oil in oil or Northern Securities in railroads.
1. Behavioral advertising is online advertising where the type of ad selected is based on websites visited, actions taken, or user information. It allows for targeted ads but raises privacy concerns.
2. The FTC issued principles for industry self-regulation of behavioral advertising focusing on transparency, security, consent, and sensitive data use. However, the effectiveness of self-regulation alone is debated.
3. While industry opponents argue legislation could harm innovation, supporters believe laws are needed to ensure transparency and privacy protections, as self-regulation requires monitoring and evidence of compliance with principles.
1. Behavioral advertising is online advertising where the type of ad selected is based on websites visited, actions taken, or user information. It allows for targeted ads but raises privacy concerns.
2. The FTC issued principles for industry self-regulation of behavioral advertising focusing on transparency, security, consent, and sensitive data use. However, some argue self-regulation alone is not sufficient and legislation may be needed to monitor compliance.
3. There is debate around whether additional legislation is needed to regulate behavioral advertising and limit data collection, or if this would be harmful. Monitoring industry compliance with principles could help address these issues.
1. Behavioral advertising is a form of online advertising where ads are selected based on websites visited, actions taken, or user information to target users.
2. There is debate around whether behavioral advertising violates privacy laws and if self-regulation is sufficient given consumers' growing awareness of privacy issues related to targeted ads.
3. While industry argues that legislation could harm innovation, privacy advocates and lawmakers support regulations to increase transparency around data collection and use for behavioral advertising. Monitoring and evidence are needed to ensure self-regulatory principles are followed.
1. Behavioral advertising is a form of online advertising where ads are selected based on websites visited, actions taken, or user information to target users.
2. Consumers have become more aware of privacy issues related to behavioral advertising and are concerned about being targeted with ads based on their browsing history.
3. There is debate around whether behavioral advertising violates privacy laws and whether self-regulation or legislation is needed to protect consumer privacy and provide transparency in online advertising practices.
This presentation by Geoffrey A. Manne, Founder & Executive Director of the International Center for Law and Economics was made during the discussion on "Big Data: Bringing competition policy to the digital era" held during the 126th meeting of the OECD Competition Committee on 29 November 2016. More papers and presentations on the topic can be found out at www.oecd.org/daf/competition/big-data-bringing-competition-policy-to-the-digital-era.htm
1) The Industry Graph provides contextual information about competitive industries to enhance searching, discovery, and decision-making. It maps over 16,000 granular industries and the relationships between competitors, suppliers, buyers, and other forces within each industry.
2) The Industry Graph allows users to search for a company like Toyota within a specific industry context, such as the transportation energy industry. This provides relevant competitive intelligence instead of broad results across all industries.
3) Discovery algorithms analyze news, social media, and other unstructured data to surface interesting trends and changes within industries. This helps users gain real-time situational awareness without manually searching large amounts of data.
Here, there, and everywhere: Correlated online behaviors can lead to overesti...Ира Пустовит
Randall A. Lewis, Justin M. Rao, and David H. Reiley: “Here, there, and everywhere: Correlated online behaviors can lead to overestimates of the effects of advertising. Исследование, заставляющее усомниться во многих ранее принятых интернет-метриках
The Power of Google: A Review of the 2011 Senate Subcommittee HearingShanna Kurpe
Internet Marketers and business professionals are watching closely as the U.S. Senate Subcommittee for Antitrust, Competition Policy and Consumer Rights seeks to answer the hard question, "Is Google a Monopoly?". In this presentation, Shanna Kurpe explains the hearing, introduces key players, and poses thoughtful questions about the Internet Law and Search Engine Marketing.
Is Google degrading search? Consumer Harm from Universal Search (Wu)Luther Lowe
Google has increasingly developed its own content like reviews and shopping results that it displays prominently in search results. This may reduce consumer welfare if Google's internal content is inferior. The study implemented randomized experiments to compare users' engagement with Google's standard search results featuring prominent placement of Google content versus results where the top search feature drew from various review sites based on Google's own algorithm. Users were around 40% more likely to engage with the top search feature when it drew from various sites rather than just Google content, suggesting Google reduces consumer welfare by excluding competitors' reviews. The results demonstrate that for local searches, Google degrades its search quality by favoring its own content over what its algorithm would surface as better results.
This document provides a case study analysis of Google. It discusses:
1) Google's mission to organize the world's information and make it universally accessible. It summarizes Google's business model, partnerships, and financial success.
2) Google's culture of innovation, emphasizing creativity, flexibility, and empowering knowledge workers. It allows engineers time to work on their own projects.
3) Challenges facing Google like ensuring ethical search results, addressing privacy concerns, and adapting to a changing information environment while maintaining growth.
Similar to 7. is there a market for organic search engine results and can their manipulation give rise to antitrust liability (20)
This document discusses the debate around whether ideology influences antitrust policy discussions. While antitrust is often portrayed as an apolitical, economics-based field, the author argues that ideology does matter. Specifically, differences in antitrust views stem from underlying differences in philosophies around issues like market robustness, government's role, and the virtues of dominant firms. The author uses "conservative" to refer to more permissive views toward monopolies and restraints, associated with Chicago School thinking, and "liberal" to refer to more interventionist views, associated with Post-Chicago School thinking. Overall, the author contends antitrust arguments incorporate ideological stances and are not purely technical in nature.
This document summarizes the historical background of exclusionary conduct in antitrust law. It discusses how courts have struggled for decades to distinguish lawful competitive conduct from unlawful anticompetitive behavior by monopolists. In the late 19th century, large trusts dominated many industries, inspiring the Sherman Act of 1890 which aimed to promote competition and prohibit monopolies. However, the precise definitions of "exclusionary" and "predatory" conduct remained elusive. One of the earliest significant cases was against Alcoa in 1945, where the court found the company unlawfully monopolized the aluminum ingot market through expanding production capacity in an intentional effort to exclude competitors. This Alcoa standard of monopolization became influential through the 1970s.
1. intel and article 102 tfeu case law. making sense of a perpetual controversyMatias González Muñoz
This document summarizes a paper analyzing the persistent controversy around case law concerning exclusive dealing and loyalty rebates under Article 102 TFEU. The paper seeks to explain why disagreement over these practices has continued for decades. It argues that the controversy stems primarily from "frictions" in the case law where some rulings are difficult to reconcile with the logic of others, rather than fundamental disagreements over objectives. Specifically, exclusive dealing and rebates are currently subject to a "rule" where they are presumed abusive, but the paper argues they are more analogous to practices subject to a "standard" where effects must be demonstrated.
5. what do we worry about when we worry about price discrimination.Matias González Muñoz
This document discusses price discrimination, which refers to selling identical products at different prices to different people. New technologies now enable more sophisticated price discrimination through consumer tracking and data mining. Retailers can identify consumers through loyalty programs, cookies, and device IDs. They track consumer behavior both online and offline using tools like facial recognition. This allows targeted ads, dynamic pricing, and individualized coupons. While some argue this empowers consumers, critics worry it reduces transparency and fairness in pricing. The document examines the economics, law, and ethics around using personal information for retail price discrimination.
Receivership and liquidation Accounts
Being a Paper Presented at Business Recovery and Insolvency Practitioners Association of Nigeria (BRIPAN) on Friday, August 18, 2023.
The Future of Criminal Defense Lawyer in India.pdfveteranlegal
https://veteranlegal.in/defense-lawyer-in-india/ | Criminal defense Lawyer in India has always been a vital aspect of the country's legal system. As defenders of justice, criminal Defense Lawyer play a critical role in ensuring that individuals accused of crimes receive a fair trial and that their constitutional rights are protected. As India evolves socially, economically, and technologically, the role and future of criminal Defense Lawyer are also undergoing significant changes. This comprehensive blog explores the current landscape, challenges, technological advancements, and prospects for criminal Defense Lawyer in India.
सुप्रीम कोर्ट ने यह भी माना था कि मजिस्ट्रेट का यह कर्तव्य है कि वह सुनिश्चित करे कि अधिकारी पीएमएलए के तहत निर्धारित प्रक्रिया के साथ-साथ संवैधानिक सुरक्षा उपायों का भी उचित रूप से पालन करें।
Lifting the Corporate Veil. Power Point Presentationseri bangash
"Lifting the Corporate Veil" is a legal concept that refers to the judicial act of disregarding the separate legal personality of a corporation or limited liability company (LLC). Normally, a corporation is considered a legal entity separate from its shareholders or members, meaning that the personal assets of shareholders or members are protected from the liabilities of the corporation. However, there are certain situations where courts may decide to "pierce" or "lift" the corporate veil, holding shareholders or members personally liable for the debts or actions of the corporation.
Here are some common scenarios in which courts might lift the corporate veil:
Fraud or Illegality: If shareholders or members use the corporate structure to perpetrate fraud, evade legal obligations, or engage in illegal activities, courts may disregard the corporate entity and hold those individuals personally liable.
Undercapitalization: If a corporation is formed with insufficient capital to conduct its intended business and meet its foreseeable liabilities, and this lack of capitalization results in harm to creditors or other parties, courts may lift the corporate veil to hold shareholders or members liable.
Failure to Observe Corporate Formalities: Corporations and LLCs are required to observe certain formalities, such as holding regular meetings, maintaining separate financial records, and avoiding commingling of personal and corporate assets. If these formalities are not observed and the corporate structure is used as a mere façade, courts may disregard the corporate entity.
Alter Ego: If there is such a unity of interest and ownership between the corporation and its shareholders or members that the separate personalities of the corporation and the individuals no longer exist, courts may treat the corporation as the alter ego of its owners and hold them personally liable.
Group Enterprises: In some cases, where multiple corporations are closely related or form part of a single economic unit, courts may pierce the corporate veil to achieve equity, particularly if one corporation's actions harm creditors or other stakeholders and the corporate structure is being used to shield culpable parties from liability.
Genocide in International Criminal Law.pptxMasoudZamani13
Excited to share insights from my recent presentation on genocide! 💡 In light of ongoing debates, it's crucial to delve into the nuances of this grave crime.
This document briefly explains the June compliance calendar 2024 with income tax returns, PF, ESI, and important due dates, forms to be filled out, periods, and who should file them?.
What are the common challenges faced by women lawyers working in the legal pr...lawyersonia
The legal profession, which has historically been male-dominated, has experienced a significant increase in the number of women entering the field over the past few decades. Despite this progress, women lawyers continue to encounter various challenges as they strive for top positions.
Business law for the students of undergraduate level. The presentation contains the summary of all the chapters under the syllabus of State University, Contract Act, Sale of Goods Act, Negotiable Instrument Act, Partnership Act, Limited Liability Act, Consumer Protection Act.
Sangyun Lee, 'Why Korea's Merger Control Occasionally Fails: A Public Choice ...Sangyun Lee
Presentation slides for a session held on June 4, 2024, at Kyoto University. This presentation is based on the presenter’s recent paper, coauthored with Hwang Lee, Professor, Korea University, with the same title, published in the Journal of Business Administration & Law, Volume 34, No. 2 (April 2024). The paper, written in Korean, is available at <https://shorturl.at/GCWcI>.
7. is there a market for organic search engine results and can their manipulation give rise to antitrust liability
1. Electronic copy available at: http://ssrn.com/abstract=2473210
James Ratliff & Daniel Rubinfeld PAGE 1 of 23
Is There a Market for Organic Search Engine Results and
Can Their Manipulation Give Rise to Antitrust Liability?
James Ratliff and Daniel L. Rubinfeld
I. Introduction
Google answers users’ questions (“search queries”) with lists of relevant web sites and other
information (“organic search” results) which are accompanied by advertising.3
In recent
years Google has been accused of manipulating its organic search results to favor its own
services.4
These allegations have often been accompanied by appeals for regulatory or
antitrust intervention. While often asserted with passion, the public protestations about
1 Ratliff is Executive Vice President, Compass Lexecon, jratliff@compasslexecon.com
2 Rubinfeld is Robert L. Bridges Professor of Law and Professor of Economics Emeritus, U.C. Berkeley and
Professor of Law, NYU, drubinfeld@law.berkeley.edu. We wish to thank Google for financial support
and Hal Varian for helpful comments. This paper was not submitted with respect to any agency
investigations or private litigation. None of the opinions expressed in this paper necessarily represent the
views of Google.
3 These queries may be “navigational searches,” where the user just wants to go a particularly website, e.g.,
ebay.com, and enters “ebay” as a query in the search engine rather than type “ebay.com” in the web
browser’s address field. More relevantly for search advertising, a user can issue an informational query
(e.g., “how high is Mount Everest?”) or a transactional query (e.g., “cordless drill”). (See Elisa Gabbert,
“The 3 Types of Search Queries & How You Should Target Them,” WordStream, December 10, 2012,
<http://www.wordstream.com/blog/ws/2012/12/10/three-types-of-search-queries#.>.)
4 In 2013 the FTC concluded its investigation of Google’s search engine practices. See “Statement of the
Federal Trade Commission Regarding Google’s Search Practices, In the Matter of Google, Inc.,” FTC File
Number 111-0163, January 3, 2013. A related investigation by the European Commission remains open at
this date; Cases COMP/C-3/39/740 (Foundem v. Google), COMP/C-3/39.775 (1plus v. Google) and
COMP/C-3/39.768 (Ciao v. Google).
2. Electronic copy available at: http://ssrn.com/abstract=2473210
Is There a Market for Organic Search?
Page 2 of 23
alleged antitrust violations are often made without legal or economic rigor. In particular, it is
difficult to discern precisely what alleged relevant markets are implicated either as sources of
alleged market power or as loci of alleged harm to competition. Moreover, the boundaries of
relevant markets are often assumed or asserted without the required analysis.
In this paper we focus on the core antitrust issues that have been raised. We explore
possible choices of relevant markets that might make the antitrust allegations meaningful.
We test some of these possible relevant markets against basic principles of market definition.
However, we do not perform the detailed factual and economic analyses required to
determine the specific boundaries of any relevant market.
As part of testing potential relevant markets for consistency with basic market-definition
principles, we necessarily discuss and describe Google’s business model, which is primarily a
two-sided platform to sell advertising. In particular, we analogize the organic search results
that Google provides its users to the types of content many other advertising-selling two-
sided platforms provide to their audiences. We view Google’s two-sided Internet search–
based advertising platform as a special case of a general model of two-sided advertising
platforms.
In particular, we consider conclusory assertions that Internet search in isolation—i.e., as
distinct from and not intertwined with the sale of search advertising—is a relevant market
for antitrust analysis. Such a conclusory assertion ignores the two-sided nature of the search-
advertising platform and the feedback effects that link the provision of organic-search results
to consumers, on the one hand, and the sale to businesses of advertising accompanying
those search results on the other.
Whether the feedback effects are sufficient to require that in general any relevant market
encompass both sides of the two-sided platform is ultimately an empirical matter. In the
context of organic search and search advertising, however, it is clear that these feedback
effects are highly significant and, indeed, vital to the viability of the search-advertising
platform, because organic search offered to consumers for free would not be a viable
standalone business.
Thus the relevant market in which Google competes with respect to Internet search is at
least as broad as a two-sided search-advertising market.5
Our conclusion is justified both by
principles of market definition in two-sided platforms as well as more general principles of
market definition when firms engage in multiple activities whose prices are interrelated.
We also explore questions of what Google’s obligations with respect to its organic search
results, if any, might be to interested parties, whether consumers or businesses. In particular,
we ask whether Google has a duty to provide organic search results that are neutral with
5 For further discussion of the breadth of the relevant market see, for example, James D. Ratliff & Daniel L.
Rubinfeld (2010) “Online Advertising: Defining Relevant Markets,” Journal of Competition Law & Economics,
6(3), 1-34, (hereafter “Ratliff & Rubinfeld (2010)”),
<http://jcle.oxfordjournals.org/content/6/3/653.short>, and Geoffrey A. Manne and Joshua D. Wright,
“Google and the Limits of Antitrust: The Case Against the Antitrust Case Against Google,” 34 Harvard
Journal of Law and Public Policy, 171–244 (2011), at pages 220–223. If the relevant market is broader than
online search advertising, the competition issues to be discussed in section VII below would likely be
moot.
3. Is There a Market for Organic Search?
Page 3 of 23
respect to whether the displayed listing is for a Google business rather than a non-Google
business. In that context, we articulate and apply a standard that asks whether various
practices related to Google’s organic search results would harm competition that would have
otherwise have occurred.
II. The allegations
Although many parties have made allegations that Google has harmed competition by
manipulating a wide variety of organic search results it displays to users, it will be sufficient
in order to elicit our central arguments to focus on a subset of such allegations. We focus on
allegations and theories of harm articulated in two white papers by an industry group,
FairSearch.6,7
The FairSearch white papers implicitly assert that Google has monopoly power in both a
market for search and a market for search advertising, referring to “Google’s monopoly grip
on search and search advertising”8
and to Google’s “monopoly in Internet search and search
advertising.”9
FairSearch says that “Google has entered into competition with the very same websites
which depend upon Google to reach consumers” and, as a result, instead of “direct[ing]
users as efficiently as possible to the sites most likely to respond to their queries,” Google
now:10
tries to answer those queries directly with its own products like Google
Places (hotels, restaurants and destinations), Google Product Search
(product information and price comparisons), Google Finance
(investment and other financial issues), Google Maps (location and
direction information), and YouTube (video content).
6 FairSearch describes itself as “a group of businesses and organizations united to promote economic
growth, innovation and choice across the Internet ecosystem by fostering and defending competition in
online and mobile search. We believe in enforcement of existing laws to prevent anticompetitive behavior
that harms consumers.” <http://www.fairsearch.org/about-fairsearch/> Members of FairSearch include,
as examples, Microsoft, operator of the Bing search engine that competes with Google; travel search
providers, such as Kayak and Expedia; and product search providers, such as Foundem. (Press release,
“FairSearch.org Coalition Grows, New U.S. and International Travel Members Urge Justice Department
to Challenge Google-ITA Deal,” December 13, 2010, <http://www.fairsearch.org/wp-
content/uploads/2010/12/New-Members-Join-FairSearch-Coalition-Urging-DOJ-Challenge-to-Google-
ITA-Dec-13-20101.pdf >.
7 FairSearch (2011) “Can Search Discrimination by a Monopolist Violate U.S. Antitrust Laws?,” (hereafter
“Can Search Discrimination by a Monopolist Violate U.S. Antitrust Laws?”)
<http://www.fairsearch.org/wp-content/uploads/2011/07/Can-Search-Discrimination-by-a-Monopolist-
Violate-U.S.-Antitrust-Laws1.pdf>. FairSearch (2011) “Google’s Transformation From Gateway to
Gatekeeper: How Google’s Exclusionary and Anticompetitive Conduct Restricts Innovation and Deceives
Consumers,” (hereafter “Google’s Transformation From Gateway to Gatekeeper”),
<http://www.fairsearch.org/wp-content/uploads/2011/11/Googles-Transformation-from-Gateway-to-
Gatekeeper-Edited.pdf>.
8 “Can Search Discrimination by a Monopolist Violate U.S. Antitrust Laws?” at page 1.
9 “Google’s Transformation From Gateway to Gatekeeper” at page 1.
10 “Google’s Transformation From Gateway to Gatekeeper” at page 2.
4. Is There a Market for Organic Search?
Page 4 of 23
FairSearch describes an alleged worry that:11
Google has both the incentive and ability to manipulate its search results
in ways that steer users to its own (possibly inferior) services and away
from competitors--and thus deprive these competitors of the customers
they need to survive.
Elsewhere, FairSearch explicitly states that Google’s allegedly exclusionary acts are
“leveraging its dominance in search to subdue its rivals.”12,13
The FairSearch white papers are not specific about the alleged relevant markets implicated
by their allegations. The papers appear to allege that Google leverages power in a market for
search (e.g., “leveraging its dominance in search to subdue its rivals”). Presumably other
relevant markets at issue would be relevant markets in which, for example, vertical search
competitors of Google compete. These vertical-search competitors might include Yelp,
Expedia, or Trip Advisor for travel services.
Our analysis will emphasize the significant difference between a market for search—i.e.,
the provision of organic search results to consumers in isolation from other activities—as
opposed to a market for search advertising.
Whether search advertising is a relevant market in which Google competes is ultimately a
matter to be determined by factual and economic analyses in the context of the legal
antitrust issues that are raised.14
We will argue that there is no relevant market for organic
search itself because the scope of search in isolation is too narrow to allow an analysis of
Google’s incentives that have implications for search. We will also explain that an economic
analysis of Google’s incentives regarding search is necessary if one wishes to evaluate
whether Google could exercise market power in search and, consequently, whether search in
isolation could indeed be a relevant market. Before we can articulate this argument, we must
first discuss Google’s business model.
11 “Can Search Discrimination by a Monopolist Violate U.S. Antitrust Laws?” at page 1.
12 FairSearch, “Google Strategy: If You Can’t Buy ‘Em, Use Your Dominance to Crush ‘Em,” FairSearch
Blog, September 1, 2011, <http://www.fairsearch.org/search-manipulation/google-strategy-if-you-cant-
buy-em-use-your-dominance-to-crush-em/>. This is one of several examples of FairSearch invoking a
“leveraging” formulation.
13 P. Sean Morris asserts that Google is an “essential facility from a commercial perspective, but does not
necessarily meet the criteria of essential facility under antitrust law” and that the relevant market is Internet
search (by which he appears to mean—as is implicit in his market-share calculations—organic search in
isolation). His assertion of the relevant market is offered without any economic or legal foundation.
(P. Sean Morris, “Solving Google’s Antitrust Dilemma: Cognitive Habits and Linking Rivals When There
is Large Market Share in the Relevant Online Search Market,” draft March 7, 2013,
<http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2241200>, forthcoming in Wake Forest Journal of
Business and Intellectual Property Law. We discuss claims that Google is an essential facility in section VII.A.
14 For a discussion of the issues involved, see Ratliff & Rubinfeld (2010).
5. Is There a Market for Organic Search?
Page 5 of 23
III. A general model of a platform that monetizes consumer
attention through the sale of advertising
In order to sell their products, services, ideas, or politicians to consumers, the sellers need to
communicate the availability, features and characteristics, and prices of their offerings.15
A
publisher is an entity that attracts consumers that are willing to provide attention to
messages the publisher delivers on behalf of advertisers. When communications lead to
consummated transactions, the seller (i.e., advertiser) benefits. Thus, the advertiser has a
willingness to pay a publisher for the opportunity to deliver its message to consumers.
Such advertising platforms are two-sided markets. As we have explained before:16
The sale of advertising to businesses and the display of advertisements to
consumers take place in a two-sided market at the hub of which sits the
content publisher (and any other intermediaries facilitating the sale or
display of the advertising).17
The publisher’s function is to match
consumer eyeballs with the marketing messages of businesses; the
publisher profits when it is able to attract the consumer eyeballs at a cost
less than the amount the businesses are willing to pay the publisher to
display their ads to these consumers.
In many two-sided advertising scenarios, the profit-making side (the
advertisers) must subsidize the consumer side, where the subsidy to the
consumer is the provision of the nonadvertising content—typically for
free or at least below the average cost of producing and distributing the
content—that attracts the consumers in the first place. The publisher
pays for the creation and distribution of the content from the revenue it
receives from the advertisers.
III.A. Varieties of honey
Publishers often use “honey” to attract consumers willing to devote attention to advertisers’
messages.18
Honey could be cash or a gift, as in the case of a promoter of timeshare
properties who offers qualified leads an iPad in return for attending a sales presentation.
15 Communications of a less-objective nature can also enhance the demand for the product being promoted.
For simplicity of exposition, we refer to the advertiser as a seller and to the target of the advertising as a
consumer, recognizing that the transaction sought by the advertiser may not be a sale and that the target of
the advertising may be a business or other decision maker acting in a role other than as a consumer.
16 Ratliff & Rubinfeld (2010), at pages 7–8.
17 Simon P. Anderson & Jean J. Gabszewicz, “The Media and Advertising: A Tale of Two-Sided Markets,” in
Handbook of Cultural Economics (Victor Ginsburgh & David Throsby eds., 2006). Other examples of two-
sided markets include credit-card networks (matching consumers bearing the network’s cards with
merchants that accept the network’s card) and shopping malls (that match consumers wishing to make a
variety of purchases with a variety of merchants wishing to sell their wares). Jean-Charles Rochet & Jean
Tirole, “Platform Competition in Two-Sided Markets,” Journal of the European Economic Association (1) 990
(2003).
18 The honey is often offered free of charge to the consumer. This is the case for platforms that are purely
advertising supported. Hybrid models, where consumers pay a subscription or other access fee and there is
also advertising, are also in use.
6. Is There a Market for Organic Search?
Page 6 of 23
More common and more relevant to this paper, honey may be content that attracts
consumers. This content can be factual and informative or entertaining or both. This
content can reach the consumer via sight or sound after having been transmitted through a
book or magazine, broadcast over television or radio, or delivered via a website viewed by
the consumer. We refer to “organic content” as content that is meant to play the role of
honey and for the delivery of which the publisher is not directly paid by any advertiser.19,20
Examples of organic-content honey include weather; news; this week’s winning lotto
numbers; astrological forecasts; sports scores; relationship advice; political rants; jokes;
how-to guides; financial advice; short stories and poetry; denials of humans’ role in climate
change; baby pictures or cat videos, and “status updates” of “friends.”
It may be the case that no honey is required to attract highly-motivated customers to
attend to the advertiser’s message. For example, before Craigslist, job seekers would
purchase the local newspaper and turn directly to the want-ad section (i.e., bypassing the
editorial content) to review ads for job openings.
III.B. Organic content can benefit third parties
Organic content serves as honey precisely because it offers the prospect of benefit to
consumers. In expectation of greater advertising revenue, publishers often offer organic
content to consumers for free or at a price lower than what publishers would charge if they
did not also display ads.
Because content accompanied by advertising is voluntarily consumed, we can conclude
through revealed preference that consumers, at least in expectation, are better off having
consumed the combination of organic content and advertising, even accounting for the time
required and any annoyance caused by the advertising.21
On most advertising-supported
platforms, typically only a fraction of advertising generates a sale of the product or service
advertised. This shows that the content itself must have significant value apart from the
direct value of the advertising to consumers.
19 A publisher may offer hybrid honey that combines organic content with other incentives. For example,
Microsoft offers Bing Rewards, whereby consumers “[g]et rewarded for searching and doing with Bing…
including gift cards, Microsoft Points for Xbox, movie nights from Redbox, and more….” (Microsoft,
“Bing Rewards,” <http://www.bing.com/explore/rewards/>, accessed August 5, 2013.) Pre-Bing,
Microsoft offered “Microsoft Live Search cashback,” whereby “[c]onsumers who buy items from
participating merchants after searching for them and clicking on an ad can get a cash rebate….” (Jessica E.
Vascellaro and Robert A. Guth,” Microsoft Offers Reward: Consumers Can Get Cash for Purchases Via
Search Service,” Wall Street Journal, May 22, 2008,
<http://online.wsj.com/article/SB121136250134610255.html>.)
20 The publisher does not always need to provide the honey, but instead can take advantage of consumers
attracted by others. For example, an outdoor sporting event or music festival can attract large crowds. A
publisher unrelated to these events could exploit this aggregation of consumers by employing a sky-writing
airplane or a logo-emblazoned blimp to fly over the crowd. Other examples are billboards and other signs
that are viewed simply because they become in the consumer’s line of sight; i.e. the in-your-face nature of
the advertising causes its message to be involuntarily consumed by consumers.
21 As we noted above in the want-ad example, advertising is not necessarily annoying and need not otherwise
create disutility. The ads may be perceived as valuable by the audience of the organic content. Indeed, the
ads themselves may serve the role of organic content and even make organic content unnecessary to
attract consumers’ attention, as with publications (e.g., Craigslist) that are predominantly ads.
7. Is There a Market for Organic Search?
Page 7 of 23
Thus the ex ante “price” a consumer “pays” to consume the publisher’s content is
negative, and is equal to the negative of the consumer’s expected value from consuming the
content (net, in particular, of any costs due to consuming the associated advertising). It
follows that consumers typically benefit from publishers’ organic content even when those
consumers never purchase from an advertiser or never click on an ad (that would thereby
generate revenue for the publisher). A notable example of this phenomenon is the provision
of advertising-supported news.
The content honey that attracts consumers might deliver benefits as well to third parties at
no charge to those parties. For example, a publication that wants to sell ads to suppliers of
computer and mobile-device products may provide coverage of Apple’s latest product
launch, even though Apple may not advertise in the publication or otherwise pay the
publication for the editorial coverage.22
For the publisher, this content serves as honey to
attract consumers’ attention, which it monetizes by displaying ads from paying advertisers.
For Apple, the publisher’s content serves as free publicity. The publisher chooses this
content because it will effectively attract consumers’ attention. The fact that it also provides
a benefit to Apple for which Apple does not pay is irrelevant to the publisher’s choice.
Free publicity is a benefit for third parties that do not pay for it and have no right to
demand it. A company receives free publicity only to the extent it is in the publisher’s
interest to provide it. That company has no right to demand such free publicity, because that
company has not given the publisher any consideration for the publicity.
III.C. Advertising provides greater value when its message can be
targeted to the consumers to whom it is delivered
If the publisher can attract consumers and deliver an advertiser’s message to them at a cost
lower than the amount the advertiser is willing to pay for message delivery, there is a surplus
which can be shared between the publisher and the advertiser. The consumer also benefits
from the advertising when the message delivered from the advertiser informs the consumer
and helps him or her to make better choices—in addition to the benefit to the consumer
from the content.
This surplus will be larger the better the publisher is able to match the advertisers’
messages to the consumers that receive delivery of these messages.23
Consumers are
heterogeneous as are the products advertisers want to promote.24
Delivering an advertising
message for a particular product to a consumer who has no interest in the product, even
after being exposed to the ad, provides no benefit to the advertiser and is a squandering of
22 A publication may present content related to a paying advertiser in the organic content section. Further, a
publication might condition what would otherwise be free publicity for a firm on that firm purchasing paid
advertising. Alternatively, an advertiser may sponsor organic content directly; this is known as “native
advertising” or “sponsored content.” (Tanzina Vega, “Sponsors Now Pay for Online Articles, Not Just
Ads,” New York Times, April 7, 2013, <http://www.nytimes.com/2013/04/08/business/media/sponsors-
now-pay-for-online-articles-not-just-ads.html>.)
23 For a discussion of the value from targeting advertising, see section III.B of Ratliff & Rubinfeld (2010).
The degree to which an ad can be targeted to an audience is only one factor in determining the optimal
choice of ads to display. It may produce more surplus for the publisher and advertiser to split to display (a)
an ad for a high-margin product that, however, cannot be well targeted than (b) an ad for a low-margin
product that can be well targeted.
24 We will use “product” to refer generally to a product, service, idea, politician, etc. being promoted.
8. Is There a Market for Organic Search?
Page 8 of 23
the opportunity to have presented a more relevant message to that consumer. Targeting the
advertising messages—i.e., matching advertising messages to the consumers to whom they
will be delivered—is more important when a consumer’s interests are narrow or when a
product’s appeal is narrow.
Effective targeting requires that the publisher (a) understand the types of consumers that
are most likely to have at least a latent interest in the advertiser’s product25
and (b) be able to
identify the relevant characteristics of consumers its honey attracts.26
The relevant characteristics of consumers might involve demographic characteristics or
might be signaled by the consumer’s choice to read an article on a particular topic, by the
consumer’s previous purchases, or—as in the case of a search query—by the consumer’s
explicit identification of an interest, e.g., “hotels near the Empire State Building.”
Improved targeting of ads can benefit both advertisers and consumers and therefore also
publishers. The advertiser can lower the acquisition cost of a sale when its ads are better
targeted.27
Consumers benefit from better-targeted ads because the ads are more relevant to
their purchasing decisions. That both advertisers and consumers benefit from better ad
targeting increases the surplus that the publisher’s activities generate, typically allowing the
publisher to earn greater profits.
III.D. A publisher can advertise its own products at an opportunity cost
equal to the value the publisher could alternatively receive from
selling advertising to an unaffiliated advertiser
A publisher may sell advertising to unaffiliated advertisers and may also display ads for the
publisher’s own products or products of affiliated business units (so-called “house ads”).
For example, United Airlines’ Hemispheres in-flight magazine has organic content relating
to topics of interest to United’s customers. When these customers read the magazine, they
are also exposed to ads purchased by advertisers unaffiliated with United. In addition, there
is content—some styled as organic content and some styled as traditional sold advertising—
that informs the reader about United’s own products and services.
For another example, Forbes.com advertises it Forbes BrandVoice™ product, which
allows marketer to create content on the Forbes digital publishing platform.28
25 By “latent interest in the product” we mean an interest that the consumer would not acknowledge before
being exposed to the advertiser’s message but would acknowledge post-exposure.
26 This formulation, “identify the types of consumers its honey attracts,” is best suited when the composition
of the attracted consumers is independent of the particular advertiser. In this case the publisher will seek
advertisers that are well matched to the attracted audience. Alternatively, a publisher may deploy honey
that is designed to attract consumers that are particularly well matched to particular advertisers’ messages.
For example, a publisher that wants to sell advertising to distributors of high-performance automobile
accessories may create a magazine with content that is of interest to car enthusiasts.
27 A publisher may well charge a higher price, whether per-impression or per-click, for a better-targeted ad
than for a less well targeted ad. The resulting higher probability that the impression or click will generate a
sale for the advertiser offsets those higher advertising prices; i.e., reduces the advertiser’s acquisition cost
of a sale. As long as the provision of advertising is at all competitive, the advertiser will benefit to at least
some degree from improvements in targeting.
28 See Forbes, BrandVoice, <http://www.forbesmedia.com/brandvoice-2/>, accessed September 18, 2013.
9. Is There a Market for Organic Search?
Page 9 of 23
It would be incorrect for two reasons to say that a publisher provides free advertising to
itself for its own products. First, the publisher incurs the costs of providing the platform on
which the ads are displayed (e.g., United incurs the costs of publishing and distributing its
magazine). Second, ads for its own products are displayed with an opportunity cost. Had the
publisher not displayed ads for its products, the publisher could have instead displayed ads
paid for by an unaffiliated advertiser. Thus a cost to a publisher of advertising its own
products is the opportunity cost equal to the value the publisher would have alternatively
received by selling the same ad-display inventory to the highest-value unaffiliated advertiser.
Google has invested substantial resources to the measurement of this important opportunity
cost.
We noted in the United Airlines’ Hemispheres example above that a publisher can include
content that is not styled as traditional sold advertising, but nevertheless promotes the
publisher’s affiliated businesses. This practice is quite common when publishers have
affiliated businesses that could benefit from promotion. Google’s inclusion of links to its
affiliated businesses within organic search results is another example of this practice. We
discuss in section V the tradeoff that any publisher with affiliated business faces when
deciding whether to use its content to promote those affiliated businesses. Because the
publisher internalizes the benefits to its affiliated businesses from promotion in the
publisher’s content, a publisher can have incentives to feature its affiliated businesses in the
content to a greater degree than would be the case if those same businesses were unaffiliated
with the publisher.
III.E. A publisher will co-determine its organic content and its
advertising messages to maximize its profit
Different choices of organic content can result in different consumers being attracted. For
any given set of advertisers and their ads, different choices of organic content can result in
higher or lower quality matching between the consumers attracted and the ads displayed.
Thus the choice of organic content can affect the publisher’s profit.
Conversely, for a given set of consumers attracted, different choices of ads will be better
or less well matched to these consumers. Thus the choices of ads can affect the publisher’s
profit as well. It follows that a publisher will choose its organic content and the ads it
displays to jointly maximize the publisher’s profit over the long run.
IV. Google’s two-sided platform monetizes the attention of
consumers attracted to the display of organic search
results by selling adjacent advertising
Google’s sale of search advertising through its two-sided platform is a special case of the
general model described above in section III. Google plays the role of publisher as defined
there.
Google allows consumers to ask questions in the form of search queries. In reply to such a
query, Google responds with pages and pages of links to web-resident documents of
information. The list of links with which Google responds to a query is made possible by
Google’s continuous indexing of content on the Web. The owner of a website or its content
10. Is There a Market for Organic Search?
Page 10 of 23
does not pay Google to be captured in Google’s index or to be listed in organic search
results.29
The consumer may benefit directly from the list of organic search results—for example,
when the answer to the consumer’s question (e.g., “in what year did Kramer vs. Kramer win
Best Picture?”) is contained at the top of the organic search results. Other times, the
consumer benefits indirectly from the organic search results (and through ads as well) by
clicking on one of the listed links to find information elsewhere on the Web that is relevant
to the consumer’s query.30
Thus, the honey offered by Google is the organic search results for which neither the
querying user nor the owners of the websites listed pay Google.
IV.A. The user’s search query string plays a special role in improving
the matching of ads to consumers
We described in section III.C above how improved targeting of ads to consumers can
increase the value for advertisers, publisher, and consumers. Users’ visits to Google’s search
site are typically prompted by the user having a concrete question to answer or topic to
explore.
The fact that a consumer enters a query search string when she arrives at Google’s search
site provides Google with specific information about the visiting consumer’s interests at the
moment of the visit. Google can combine information gleaned from the user’s search query
with any other information Google has in order to optimally choose ads to display to the
user.
IV.B. Google would maximize return visits by consumers and, hence,
advertising opportunities by providing relevant results to users’
queries
Google will attract more users to its search site the greater are users’ expectations that
visiting Google’s search site will be valuable. Users’ expectations will be largely formed and
maintained by the users’ actual experiences visiting Google’s search site.
29 A website can prevent Google from indexing its content through the use of special meta tags. For
example, embedding the HTML code “<meta name="googlebot" content="noindex">” in the <head>
section of a web page prevents Google’s “robots” from indexing the page. (Google, “Using meta tags to
block access to your site,” January 6, 2012,
<http://support.google.com/webmasters/bin/answer.py?hl=en&answer=93710>.)
30 See, for example, Google, Economic Impact, <http://www.google.com/economicimpact/>, accessed
August 22, 2013. Hal Varian, chief economist at Google, has estimated the value of search advertising to
consumers. Using some rough back-of-the-envelope calculations, he estimates the value of time saved by
users (who obtain better quality answers in less time) to be on the order of $65 billion per year. See, Hal
Varian, “Economic Value of Google,” presented at the Web 2.0 conference on March 29, 2011;
<http://cdn.oreillystatic.com/en/assets/1/event/57/The%20Economic%20Impact%20of%20Google%
20Presentation.pdf>, <http://www.transcriptsearch.com.es/id/_gI3nagglIY>, and “Google’s Hal Varian
on Economic Value of Google to US Advertisers and Customers,” bizcloud, March 30, 2011,
<http://bizcloudnetwork.com/googles-hal-varian-on-economic-value-of-google-to-us-advertisers-and-
customers>. See also, Jacques Bughin, et al., “The Impact of Internet Technologies: Search,”
McKinsey & Company, July 2011, <http://www.mckinsey.com/~/media/mckinsey/dotcom/
client_service/high%20tech/pdfs/impact_of_internet_technologies_search_final2.aspx>.
11. Is There a Market for Organic Search?
Page 11 of 23
Users’ visits to Google’s search site are often prompted by the user having a concrete
question to answer or topic to explore. Thus the value a user derives from a visit to Google’s
site will be directly related to whether she found a satisfactory answer to her question or
whether the links displayed led her to information about her topic that she found valuable.
The key characteristic of organic search results that would lead a user to find the organic
search results valuable is that those results be relevant to her search query. In some cases, the
relevance of a result can be viewed ex ante (before the user clicks on the result) and ex post
(after the user clicks on the result).31
A searcher’s decision whether to click on a results link
for further information will be based on that link’s ex ante relevance, i.e., the searcher’s
estimate of the link’s relevance based only on the text displayed in the search results. The
searcher’s long-term satisfaction with Google as a venue for search will also depend on the
ex post relevance of the links presented; i.e., how well the sites listed adequately addressed
the searcher’s information needs. In particular, when the goal of the query is to identify a
product or service that meets the user’s needs, search results that lead the user to more-
appropriate products or services would be judged ex post to be more relevant.
V. Whether Google would find it profit-maximizing to trade
off relevance of organic search results against the profit
from displaying a less-relevant organic result for an
affiliated business
We noted in section III.D that a publisher with affiliated businesses can promote those
affiliated businesses both within its advertising and within its content (as content that is not
styled as traditional sold advertising), and that Google’s promotion of its affiliated businesses
within its organic search results is an example of this common practice. We noted as well
that, because a publisher internalizes the benefit to its affiliated businesses from such
promotion, a publisher can have incentives to promote its affiliated business to a greater
degree than were those businesses unaffiliated with the publisher.
In section II we noted the FairSearch assertion that “Google has both the incentive and
ability to manipulate its search results in ways that steer users to its own (possibly inferior)
services and away from competitors….”32
We now consider Google’s private incentives for
ordering organic-search links to a Google-affiliated business relative to organic-search links
to a competing non-affiliated business in a list of organic-search results.
31 Note that in many cases a search engine will give the answer to the query directly in the results, i.e.,
without requiring the user to click on a results link. An example of such a query is “how tall is the empire
state building?.” In such cases when the searcher’s question is answered without clicking on a link, there is
no meaning to ex post relevance. For more see, for example, Shashi Seth, “A New Era of Search is about
the Answers, Not Just the Links,” TechCrunch, May 7, 2011,
<http://techcrunch.com/2011/05/07/search-answers-not-just-links/>.
32 “Can Search Discrimination by a Monopolist Violate U.S. Antitrust Laws?” at page 1.
12. Is There a Market for Organic Search?
Page 12 of 23
As part of a wider investigation into Google’s business practices, the Federal Trade
Commission (FTC) investigated this question. The FTC described its investigation and
conclusions regarding allegations that Google’s biases its display of search results:33
The FTC conducted an extensive investigation into allegations that
Google had manipulated its search algorithms to harm vertical websites
and unfairly promote its own competing vertical properties, a practice
commonly known as “search bias.” In particular, the FTC evaluated
Google’s introduction of “Universal Search”—a product that
prominently displays targeted Google properties in response to specific
categories of searches, such as shopping and local—to determine
whether Google used that product to reduce or eliminate a nascent
competitive threat. Similarly, the investigation focused on the allegation
that Google altered its search algorithms to demote certain vertical
websites in an effort to reduce or eliminate a nascent competitive
threat.… [T]he FTC concluded that the introduction of Universal Search,
as well as additional changes made to Google’s search algorithms—even
those that may have had the effect of harming individual competitors—
could be plausibly justified as innovations that improved Google’s
product and the experience of its users. [The FTC] therefore has chosen
to close the investigation.
FTC participants interpreted the findings. For example, the FTC’s outside counsel, Beth
Wilkinson, stated that,34
Undoubtedly, Google took aggressive actions to gain advantage over rival
search providers. However, the FTC’s mission is to protect competition,
and not individual competitors. The evidence did not demonstrate that
Google’s actions in this area stifled competition in violation of U.S. law.
FTC chair Jon Leibowitz opined,35
We close that investigation, finding that the evidence does not support a
claim that Google’s prominent display of its own content on its general
search page was undertaken without legitimate justification.…
Although some evidence suggested that Google was trying to eliminate
competition, Google’s primary reason for changing the look and feel of
its search results to highlight its own products was to improve the user
experience. Similarly, changes to Google’s algorithm that had the effect
of demoting certain competing websites had some plausible connection
with improving Google’s search results, especially when competitors
33 Federal Trade Commission, “Google Agrees to Change Its Business Practices to Resolve FTC
Competition Concerns In the Markets for Devices Like Smart Phones, Games and Tablets, and in Online
Search,” January 3, 2013, (hereafter “FTC press release”) <http://ftc.gov/opa/2013/01/google.shtm>.
34 FTC press release.
35 Federal Trade Commission, Google Press Conference, Opening Remarks of Federal Trade Commission
Chairman Jon Leibowitz As Prepared for Delivery, January 3, 2013 (hereafter “Leibowitz Opening
Remarks”) <http://www.ftc.gov/speeches/leibowitz/130103googleleibowitzremarks.pdf>.
13. Is There a Market for Organic Search?
Page 13 of 23
often tried to game Google’s algorithm in ways that benefitted those
firms, but not consumers looking for the best search results. Tellingly,
Google’s search engine rivals engaged in many of the same product
design choices that Google did, suggesting that this practice benefits
consumers.
In this section we put aside the FTC’s findings and ask under what conditions Google
would have the incentive to take into account—in its decisions regarding the rank ordering of
organic-search results—whether a business is affiliated with Google or is unaffiliated with
Google.
Returning to FairSearch’s assertion that “Google has both the incentive and ability to
manipulate its search results in ways that steer users to its own (possibly inferior) services
and away from competitors,”36
we note that the FairSearch white paper does not offer a
basis on which Google would determine that a competing business is higher quality and
therefore that a link to it would be more relevant than a link to the Google-affiliated
business. For the purpose of this discussion only, we will posit that the Google-affiliated
business is lower quality and therefore less relevant than the non-affiliated business and that
this fact is discernible by Google.
When Google displays a list of organic search results pointing to sites unaffiliated with
Google, Google receives no consideration from that display. As a result, Google’s incentives
in choosing what organic search results to more prominently display are to choose those
most relevant to the user’s query. This will maximize the user’s satisfaction with this
particular search experience. It will also strengthen or maintain the strength of the user’s
expectation of the value she would receive by performing a subsequent search at Google.
The sites more prominently listed in the organic search results benefit from greater free
publicity than sites listed less prominently or not at all.37
This benefit to those sites is not
internalized in Google’s choice of organic search results as long as the more prominently
listed web sites are not affiliated with Google.
When a website affiliated with Google is relevant to some degree to a user’s query,
Google’s optimal calculus regarding what links to prominently display is more complicated.
If the Google-affiliated link is also the most-relevant link to the user’s query, then the
Google affiliation does not affect Google’s choice of prominently presented links: the most
relevant site, which is also the Google-affiliated site, would be displayed most prominently.
Suppose, however, that the Google-affiliated site is to some degree less relevant to the
user’s query than is some other link. In this case, Google faces a tradeoff. First, if Google
listed the less-relevant, Google-affiliated site more prominently, Google would benefit from
the greater “free publicity” that site would receive.38
(When a site is not Google affiliated,
36 “Can Search Discrimination by a Monopolist Violate U.S. Antitrust Laws?” at page 1.
37 A typical search query on google.com results in more than 1 million results. Thus it is likely that every
nontrivially relevant result in Google’s index is listed somewhere in the query’s results.
38 We put “free publicity” in quotes when the phrase is used to characterize the value a Google-affiliated
business receives from being listed in Google’s organic search results. When we did not do so when
characterizing the value an unaffiliated business receives from being listed in Google’s organic results, for a
simple reason: The benefit an unaffiliated business receives from its listing in Google’s organic results is
14. Is There a Market for Organic Search?
Page 14 of 23
Google does not internalize the enhanced free publicity that site would receive if more
prominently listed in the organic search results. If the site is Google affiliated, Google can
internalize the free publicity the site receives.)
Second, and in the opposite direction, choosing the less-relevant Google-affiliated site to
display more prominently would, by assumption, lower to some degree the relevance of the
organic search results. This effect, if nonnegligible, could to some extent cause the user to
have a poorer search experience compared to one in which the more-relevant link was listed
more prominently. This could lead the consumer to lower her expectations for the quality
and value of a Google search the next time she had a question to answer or a topic to
research.39
When consumers have lower expectations for the value of searching on Google, they
would search less on Google for two reasons. First, even if—contrary to fact—there were
no substitutes for searching on Google, consumers would search less on Google because
there would be searches that would have been worthwhile if searching on Google had higher
value but would not be worth the consumer’s effort if searching on Google had lower value.
Second, if the value of searching on Google were perceived to be lower, some consumers
who previously had judged Google the best search engine relative to competitors’ engines
would now favor a competitor’s engine over Google’s and shift their searching to such
competing engines.
Consumers would become aware of any diminution in the relevance of Google’s results in
both absolute and relative senses. In the absolute sense, if Google led consumers to a
vertical search service that was of low value, consumers would determine that the Google
search that led them there was of low value as well. This assessment requires no awareness
by consumers of the existence of better vertical search services or of what vertical search
services are promoted by competing search engines. Indeed, if consumers did not have a
different and more negative experience when led to an assumed lower-quality vertical search
service than when led to an assumed higher-quality one, this would call into question the
assertion that one was actually lower quality than the other.
In the relative sense, consumers would become aware if Google were featuring a lower-
quality vertical search service when they become aware of a higher-quality vertical search
service that Google disfavored. Even consumers who exclusively use Google as a general-
purpose search engine could become aware of higher-quality vertical search services because
general-purpose search is not the only means by which consumers can learn about vertical
search services. News media would discuss and recommend high-quality vertical search
services. Consumers who found better vertical search services by any means would spread
the word by sharing on social networking sites and in virtual and real-life personal
communication (i.e., the power of “word of mouth”). For example, the authors have found
that frequent travelers are eager sharers of the best travel-related vertical search services they
have found.
absolutely free to that business; it pays nothing for it. The benefit to a Google-affiliated business does not
appear to be so free, however, because Google has spent tremendous amounts of money building and
operating the infrastructure that delivers this “free publicity” to a Google-affiliated business.
39 Note that all companies that provide a search engine along with other services face this same tradeoff as
do any recommender services.
15. Is There a Market for Organic Search?
Page 15 of 23
Faced with this tradeoff, Google would then need to compare (a) the harm to users’
search experiences from the more prominent display of the less-relevant link and (b) the
benefit to the Google-affiliated site from the enhanced free publicity.
Google would be more likely to more prominently display the assumed less-relevant
Google-affiliated link (a) the less the relevance differential between the two sites (and hence
the less harm to the user from more prominent display of the lower-quality site) and (b) the
greater the beneficial effect of the enhanced free publicity on Google’s affiliated business.
Conversely, Google would be more likely to more prominently display the more-relevant
website (not affiliated with Google) the greater the relevance advantage of the non-Google
site and the lower the beneficial effect of the enhanced free publicity on Google’s affiliated
business.
We note that the FTC’s “finding that the evidence does not support a claim that Google’s
prominent display of its own content on its general search page was undertaken without
legitimate justification.…”40
is consistent with an assessment by Google that the extent to
which its vertical search services are inferior to competing vertical search services is small,
zero, or even negative (i.e., that Google’s vertical services could be superior to competitors’
vertical search services).
The above discussion offers some guidance as to how one might give clarity to the term
“search bias.” If “search bias” simply represents the practice of ranking one’s own sites
higher in the presentation of search results, then the concept has little relevance from an
antitrust perspective because there would be no way to distinguish cases when that “bias”
was pro-competitive—for example, because it resulted from “innovations that improved [the
search engine’s] product and the experience of its users”41
—from cases when that “bias” was
anticompetitive according to a standard such as we discuss in section VII below.42
One final caveat. In this paper we will not evaluate any non-antitrust claims that Google
engaged in false advertising or other deceptive practices. In essence, we will assume that
Google makes no representation or guarantee, explicitly or implicitly, that sites listed in its
organic search results are listed in declining order of some metric of relevance.43
In other
40 Leibowitz Opening Remarks.
41 FTC press release.
42 For a more nuanced discussion of the meaning or lack of meaning of search neutrality, see Daniel A.
Crane, “Search Neutrality as an Antitrust Principle,” University of Michigan Public Law Working Paper
No. 256, 2011), available at http://ssrn.com/abstract=1961742. See also, Marina Lao, “‘Neutral’ Search as
a Basis for Antitrust Action?” Harvard Journal of Law & Technology,” Volume 26, Number 2, Spring 2013.
See also, Oren Bracha and Frank Pasquale, “Federal Search Commission? Access, Fairness, and
Accountability in the Law of Search.” 93 Cornell Law Review (2013), 1049-1210. The authors point out
search engine “bias” can cover a wide range of phenomena, which may or not require a regulatory
response (at page 1167).
43 “Relevance is a slippery and subjective concept, different for every user and every query, and there is no a
priori way to define it….” (Geoffrey A. Manne and Joshua Wright (2011) “If Search Neutrality is the
Answer, What’s the Question?,” Lewis & Clark Law School Legal Research Paper Series, Paper No.
2011-14, <http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1807951>, at page 12.)
16. Is There a Market for Organic Search?
Page 16 of 23
words, we assume that consumers understand that Google may elevate the search ranking of
a Google-affiliated web site because it is Google affiliated.44,45
VI. Organic Search Results is Not a Business in Itself and
Cannot Be the Scope of a Properly Defined Relevant
Antitrust Market
We now consider the implicit allegation by FairSearch that search is a standalone relevant
market for antitrust analysis.46
In isolation, organic search generates no revenue but requires substantial sunk investments
and ongoing operational costs; in itself organic search offered for free is unprofitable.
Further, as we explained in section III.E, a publisher will optimally co-determine its
organic content and advertising to maximize its profit. In other words, Google’s choice of
organic search results, in reply to any given search query string, serves the interest of
Google’s profit from its overall search-advertising business.
We now explain why Google’s organic search service cannot be meaningfully said to
compete in a relevant market limited to organic search. We argue from two different
perspectives to arrive at the same conclusion in both cases. First we argue that the
interdependence of the economics of organic search and search advertising prevents a
relevant market from being limited to only organic search. Second, we exploit the fact that
Google’s search advertising takes place in a two-sided market and refer to the literature on
market definition in two-sided platforms to conclude that the relevant market must
incorporate both sides of the platform and, hence, cannot be limited to organic search alone.
VI.A. When the defendant provides interrelated products, analysis of
the relevant market in which it competes must incorporate those
interrelated products
In an antitrust analysis of allegations of anticompetitive behavior, one or more “relevant
markets” may be defined to aid that analysis. Generally speaking, a relevant market must be
44 Our understanding is that organic rankings of advertisers’ websites by Google, Bing, Yahoo!, and other
search engines are determined on the basis of complex algorithms that take many factors into account
including the quality of the website and the relative value of the website in relation to other links.
45 In June 2013, the FTC updated guidelines first laid out in 2002 in letters it sent to general search engine
companies, including Google, Bing, Yahoo!, as well as vertical search services, to ensure that “regardless of
the precise form that search takes now or in the future, paid search results and other forms of advertising
should be clearly distinguishable from natural search results.” (Federal Trade Commission, “FTC
Consumer Protection Staff Updates Agency's Guidance to Search Engine Industry on the Need to
Distinguish Between Advertisements and Search Results,” June 25, 2013,
<http://www.ftc.gov/opa/2013/06/searchengine.shtm>. See also Edward Wyatt, “F.T.C. Tells Search
Engines to Label Advertising as Such,” New York Times, June 25, 2013,
<http://www.nytimes.com/2013/06/26/business/ftc-tells-search-engines-to-label-advertising-as-
such.html>.)
46 See section II above, citing to FairSearch references to “Google’s monopoly grip on search” and Google’s
“monopoly in Internet search.” (“Can Search Discrimination by a Monopolist Violate U.S. Antitrust
Laws?” at page 1. “Can Search Discrimination by a Monopolist Violate U.S. Antitrust Laws?” at page 1.)
17. Is There a Market for Organic Search?
Page 17 of 23
sufficiently broad that, if it were monopolized in fact or by hypothesis, the monopolist of the
conjectured market would be able to profitably exercise market power with that market.
When some activities (such as pricing of some products) affect the demand for other
products, an analysis must incorporate all of these activities and products in order to
determine whether an exercise of market power would be profitable.
While directed towards merger analysis, the DOJ/FTC Horizontal Merger Guidelines
nevertheless provide a useful explanation of the role of market definition in the analysis of
potential anticompetitive effects in non-merger contexts as well.47
The Guidelines make it
clear that market definition can be a useful legal construct in evaluating alleged
anticompetitive effects, but that market definition is not an end in itself.48
In a merger
context, the Guidelines propose that a relevant market be one in which a profit-maximizing
hypothetical monopolist would find it profitable post-merger to “impose at least a small but
significant and non-transitory increase in price (‘SSNIP’) on at least one product in the
market….”49
When the Horizontal Merger Guidelines are applied to non-merger contexts,
they are often interpreted to ask whether the hypothetical monopolist could set a price
significantly and durably above the “competitive level.”50
The Horizontal Merger Guidelines address the situation in which firms produce multiple
products and the pricing of those products is interrelated, i.e., the optimal price for one
product depends on the pricing of the other products:51
[I]f the pricing incentives of the firms supplying the products in the
candidate market differ substantially from those of the hypothetical
monopolist, for reasons other than the latter’s control over a larger group
of substitutes, the Agencies may instead employ the concept of a
hypothetical profit-maximizing cartel comprised of the firms (with all
their products) that sell the products in the candidate market. This
approach is most likely to be appropriate if the merging firms sell
products outside the candidate market that significantly affect their
pricing incentives for products in the candidate market. This could occur,
for example, if the candidate market is one for durable equipment and
the firms selling that equipment derive substantial net revenues from
selling spare parts and service for that equipment.
This situation applies here in order to evaluate assertions that organic search is a
standalone relevant market because Google does not produce organic search results in
isolation; instead organic search is a product that is complementary to Google’s sale of
47 U.S. Department of Justice and the Federal Trade Commission, “Horizontal Merger Guidelines,” August
19, 2010, <http://www.justice.gov/atr/public/guidelines/hmg-2010.html >, (hereafter “Horizontal
Merger Guidelines”).
48 Horizontal Merger Guidelines, § 4, “Evidence of competitive effects can inform market definition, just as
market definition can be informative regarding competitive effects.”
49 Horizontal Merger Guidelines, § 4.1.1.
50 For discussion of the application of the Horizontal Merger Guidelines to non-merger contexts see, for
example, Lawrence J. White (2008) “Market Power and Market Definition in Monopolization Cases: A
Paradigm is Missing,” in Wayne D. Collins, ed., Issues in Competition Law and Policy. Chicago: American Bar
Association.
51 Horizontal Merger Guidelines, footnote 4.
18. Is There a Market for Organic Search?
Page 18 of 23
advertising. Moreover, it is clear that the optimal “price” of organic search is interrelated
with the prices of search advertising. Indeed, organic search is offered for free.52
Google’s
ability to offer organic search as a free service relies crucially on its concomitant revenue
from the sale of search advertising. Were it not for the complementary search-advertising
business, organic search would likely have to be offered on a paid basis or not at all.
This view of market definition when a firm produces interrelated products is consistent
with the opinion of recently departed FTC Commissioner Thomas Rosch. According to
Commissioner Rosch, citing and quoting the above-referenced footnote from the Horizontal
Merger Guidelines,53
[I]f the price of one product affects the prices of another product sold by
the same company then the two products should be placed in the same
candidate market.
The District Court denied the FTC’s request for a preliminary injunction—because it
could not conclude “that the FTC has demonstrated likelihood of success on the merits”54
—
noting, consistent with Commissioner Rosch, that:55
Courts also generally find that a cluster of related products are in the
same relevant product market… when the prices of the products are
interdependent.
VI.B. Any analysis of Google’s incentives to manipulate its organic
search results must be performed within a market broad enough
to encompass Google’s interrelated activities
We have pointed out that if one were to look at Google’s provision of organic search results
on a standalone basis, one would find that it provides no revenue to Google, incurs
substantial costs for Google, and is thus unprofitable. Moreover, any change in Google’s
policies with respect to its provision of organic search results that generated revenue or any
52 Randal Picker disputes that Google offers its organic-search results to consumers for free. In a
presentation at a May 2013 search-engine conference at George Mason Law School, as well as earlier
presentations, Professor Picker states that the ratio of the number of ad links to the number or organic
links is a measure of an implicit “advertising price that search engines charge consumers.” (See also Randal
C. Picker, “Google and Antitrust,” American Enterprise Institute, October 5, 2012,
<http://t.co/YwILtNyw>, and Randy Picker, “Picker American Enterprise Institute Talk: Google and
Antitrust,” <http://www.youtube.com/watch?v=mSGuO4RqQeo>, October 6, 2012.) This approach is
suspect, at least and particularly in the context of organic search results accompanied by related ads,
because Professor Picker’s proposed metric implicitly treats the ads as a burden on and source of disutility
to users rather than accounting for the additional value to users from the ads themselves. There is no
reason to think that ads alongside the organic results degrade the quality of the user’s experience. The ads
are chosen to be relevant to the keywords the searcher entered. Indeed, often it is the case that the
sponsored ad is identical to the most-relevant organic result. An advertiser’s bidding sufficiently high to
win the auction to present an ad in response to a particular keyword provides a credible signal that the ad
will be relevant to the user’s query and thus useful and valuable to the user.
53 Dissenting Statement of Commissioner Rosch, In the Matter of Laboratory Corporation of America and
Laboratory Corporation of America Holdings, FTC Docket No. 9345 and File No. 101-0152 (Nov. 30, 2010).
54 Order Denying Preliminary Injunction, FTC v. Laboratory Corp. of America, SACV 10-1873 AG 31 (C.D.
Cal. 2011) (hereafter “Order Denying Preliminary Injunction”) at ¶ 167.
55 Order Denying Preliminary Injunction, at ¶ 147 (citations omitted).
19. Is There a Market for Organic Search?
Page 19 of 23
other benefits, or reduced Google’s cost of operating its search service, would likely improve
Google’s (currently negative) profits from organic search viewed as a standalone business.
Thus, Google is not profit maximizing with respect to organic search in isolation.
It is clear that viewing Google’s provision of organic search results as a standalone
business is analytically incorrect. The fact that it is unprofitable when so viewed indicates
that it is justified by its effects outside that narrow scope. Likewise, one cannot understand
Google’s incentives to make changes in its policies regarding the provision of organic search
results without also looking for the effects of such changes outside the narrow scope of
organic search as a standalone business.
Therefore it would be analytically incorrect to define a relevant market for the purposes of
antitrust analysis that includes only organic search. Instead, any antitrust analysis regarding
Google’s activities with respect to the provision of organic search results must be performed
on a broader terrain that includes at least Google’s broader search advertising business as
well as any other Google-affiliated businesses that rely significantly on their listing in
Google’s organic search results.
This perspective elaborates on earlier discussion in section V, where we pointed out that
Google must consider effects of its choices with respect to organic search results on its
broader search advertising business and any other Google-affiliated business that would
benefit from more-prominent display in organic search results.
VI.C. The literature of two-sided markets confirms that the relevant
market should be broad enough to encompass both search
advertising and organic search
The literature on two-sided platforms has developed significantly since approximately 2002.56
It is widely recognized that competition analysis, and market definition and the assessment
of market power in particular, must include both sides of the platform.
In surveying this literature, Emch and Thompson report that:57
One robust finding of this line of research has been that welfare-
maximizing and profit-maximizing prices on each side of the market
depend on cost and demand on both sides of the market.
Emch and Thompson then go on to specify a methodology for market definition in two-
sided industries that involves a SSNIP test using the hypothetical-monopolist paradigm.
They argue that it is not appropriate to apply a SSNIP to either side’s price in isolation but
56 Although the literature on two-sided platforms dates back at least to William F. Baxter, “Bank Interchange
of Transactional Paper: Legal and Economic Perspectives,” Journal of Law and Economics, (26)3, October
1983, 541–588, the literature has developed particularly intensively since the beginning of this century as
marked by seminal papers such as Jean-Charles Rochet and Jean Tirole (2002) “Cooperation among
competitors: Some economics of payment card associations,” RAND Journal of Economics, 33(4 (Winter)),
549–570.
57 Eric Emch and T. Scott Thompson (2006)“ Market definition and market power in payment card
networks,” Review of Network Economics 5(1 (March)), 45–60 (hereafter “Emch & Thompson”) at page 47.
20. Is There a Market for Organic Search?
Page 20 of 23
rather to “the sum… of the two prices charged to the two sides of the market.”58
Thus their
market-definition methodology explicitly incorporates both sides of the platform.
Similarly, Evans states that in market definition “[t]he pricing analysis must consider all
sides of the market and their interactions” and “it is not possible to [address the question of
market power in multi-sided platforms] without considering the combined and interrelated
effects on all customer groups served by the platform.”59
In regards specifically to a case involving advertising-supported media, Evans and Noel
write:60
[I]t is not possible to analyze the competitive constraints on weekly
television guides—the essence of the market definition and power
examination—without considering the sale of advertising directly
through the guides.…
Although both sides of the platform must be accounted for in any antitrust analysis,
industries differ in the intensity of their two-sidedness and, hence, in the degree to which
one side disciplines the other.61
In the context of search advertising, however, there can be
no doubt that the indirect network effects between organic search on the one side and
search advertising on the other are highly significant, because it is obvious that those
network effects are crucial for the viability of the platform. As we pointed out above, organic
search is unprofitable as a standalone business.
VII. Analysis of Antitrust Liability Arising from Alleged
Manipulation of Organic Search Results
VII.A. The standard for antitrust liability arising from alleged
manipulation of organic search results
We now discuss the appropriate standard that would underlie an analysis of Google’s
potential antitrust liability flowing from the alleged manipulation of organic search results
that favored a Google-affiliated business and disfavored a competing business that is not
Google affiliated.
To sharpen the question, we consider a case more extreme than any facts we understand
to have been alleged. We consider the case in which Google is accused of refusing to list a
competing business in Google’s organic search results.62
We then ask, assuming the factual
58 Emch & Thompson, at pages 53–54.
59 David S. Evans (2003) “The Antitrust Economics of Multi-Sided Platform Markets,” Yale Journal on
Regulation, 20, 325–381, at pages 357, 360.
60 David S. Evans and Michael Noel (2005) “Defining Antitrust Markets When Firms Operate Two-Sided
Platforms,” Columbia Business Law Review 2005(3), 667–701 (hereafter “Evans & Noel”) at page 699.
61 Evans & Noel, at pages 671, 695.
62 Professor Patterson’s more moderate hypothetical would assume that Google lowered the ranking of a
competitor’s organic-search entry. See Mark Patterson, “How Can We Measure Google’s Market Power?”
Antitrust Competition and Policy Blog, May 21, 2012,
<http://lawprofessors.typepad.com/antitrustprof_blog/2012/05/is-there-a-basis-in-antitrust-law-for-
requiring-neutral-search-results-comments-of-mark-patterson.html>. In either case, our qualitative
analysis would be quite similar.
21. Is There a Market for Organic Search?
Page 21 of 23
predicates of such an allegation were proven, what additional findings would be required for
this refusal to deal to rise to be an antitrust violation under the Sherman Act. We note in
passing that we are aware of no generalized duty to deal that would require any company to
aid a competitor, including any duty to give free publicity to a competitor.
There may be multiple ways to style an antitrust allegation arising from Google’s alleged
refusal to list a competitor within Google’s organic search results. For example, the
allegation might be framed as leveraging Google’s alleged market power in an alleged market
for search advertising to harm competition in some other market in which Google’s
competitor and the Google-affiliated business compete.63
Such an allegation could be framed
as raising rivals’ costs.64
Alternatively, the allegation could assert that Google’s organic search
results are an essential facility.65
With respect to this latter approach, we agree with Marina
Lao and other commentators that application of the essential facilities doctrine is likely to
gain little, while risking the diminution of incentives for investment and innovation.66
To be
essential, it is necessary for the facility to be able to deny access to others, but as Marina Lao
has pointed out, it is hard to see how one could point to instances in which Google has
denied access, given that websites such as Amazon, Trip Advisor, Yelp, Expedia, MapQuest,
and others remain highly ranked for certain appropriate keywords.67
Regardless of the particular framing of the allegation, we believe that a plaintiff would
need to establish two central claims. First, the plaintiff would need to show that competition
has been harmed in some well-defined relevant market. For example, a plaintiff might allege
a relevant market for a particular type of vertical search. For purposes of discussion only, we
assume that there exists such a properly defined relevant market in which both a Google-
affiliated business such as Google’s Flight Search service68
and an unaffiliated business such
as Cheaptickets.com compete.
Second, for Google’s assumed refusal to deal to be anticompetitive, we presume that the
plaintiff is required to show that Google’s behavior was predatory in that Google’s refusal to
deal is not competition on the merits but rather would make business sense (i.e., is profit
maximizing) for Google only if it resulted in the demise, or severe weakening, of the
excluded unaffiliated competitor.69
63 See section VI for why it would analytically incorrect to allege leveraging from a market for organic search
alone.
64 See, for example, Thomas G. Krattenmaker and Steven C. Salop, “Anticompetitive Exclusion: Raising
Rivals’ Costs to Achieve Power over Price,” 96 Yale Law Journal (1986), 209–293.
65 For a discussion of the application of the essential facilities doctrine to search advertising, and an argument
that Google’s search engine cannot be seen as an essential facility, see Marino Lao, “Search, Essential
Facilities, and the Antitrust Duty to Deal,” 11 Northwestern Journal of Technology and Intellectual Property
(forthcoming, 2013), at 19–46.
66 Marino Lao, “‘Neutral Search’ as Antitrust Basis,” at page 5. A noteworthy legal citation is the Court’s
dicta in Verizon Communications, Inc. v. Law Offices of Curtis v. Trinko, 540 U.S. 398, 410-11 (2004).
67 Id., at page 9.
68 <http://www.google.com/insidesearch/features/flights/>
69 This is a variant of the “profit-sacrifice test,” which has been debated in the courts and in legal
commentary. For an explication of the profit sacrifice test and its value, see A. Douglas Melamed,
“Exclusionary Conduct under the Antitrust Laws: Balancing, Sacrifice, and Refusals to Deal” (2006)
Antitrust Law Journal 73(2) 375–412. For a contrary view, see Steven C. Salop, “Exclusionary Conduct,
Effect on Consumers, and the Flawed Profit Sacrifice Standard,” 73 Antitrust Law Journal (2006), 311–374.
22. Is There a Market for Organic Search?
Page 22 of 23
VII.B. Whether Google’s assumed refusal to deal harmed competition
in a relevant market for vertical search
We now ask whether the act we assume for purposes of discussion only—that Google
refused to list its unaffiliated competitor within Google’s organic search results—harmed
competition in a relevant market for the relevant flavor of vertical search..70
In theory, such
behavior might be deemed predatory under a vertical foreclosure theory.71
However, this
would require a showing that exclusion of a competitive business from placement in
Google’s search results would lead to actual foreclosure of that competitor. Then we would
need to show that such foreclosure ultimately harmed consumers.
First, we note the obvious: Google’s assumed refusal to deal—by delisting the unaffiliated
competitor from Google’s organic search results—certainly harmed that unaffiliated
competitor. Google’s assumed action deprived the competitor of valuable free publicity. To
achieve the same effective level of publicity, the competitor would have to expend greater
funds on alternative methods of advertising and promotion; alternatively, the competitor
would have to accept lower levels of customer interest and the consequent lower levels of
business.
Second, as is well understood, harm to a competitor is not a signal of an antitrust violation
any more than harm to a competitor is a signal of intense competition on the merits. In
essence, antitrust seeks to protect competition, not competitors.72
How could the assumed
refusal to deal by Google harm competition in a relevant market for a particular type of
vertical search? The only impact of this assumed refusal to deal has on the unaffiliated
competitor is to deprive it of a particular source of free promotion.
We do not need to consider what the antitrust implications would be if Google’s organic
search listings were the only mechanism by which competitors in this vertical-search relevant
market could promote their businesses, because that is clearly counterfactual. Indeed, it is
difficult to see how Google’s assumed refusal to list a competitor in its organic search results
could foreclose the competitor’s access to ways to promote its business given the variety of
alternative search engines and the even greater variety of alternative promotional vehicles
that are available.
Furthermore, whatever market power Google might have in an assumed search
advertising market, it is clear that Google has no such power in broader markets, such as in
an alleged market for Internet advertising more generally or, a fortiori, an alleged market for
advertising broadly defined. There are many other avenues for companies to promote their
businesses other than be listed in Google’s organic search results.
70 As we noted in section VII.A, we take no position on whether there exists a relevant market for any
particular type of vertical search. In order to progress in our analysis, however, we assume that there is
such a relevant market for the purposes of this discussion only.
71 For an application of the vertical foreclosure approach in a related market, see Hal J. Singer and Daniel L.
Rubinfeld, “Vertical Foreclosure in Broadband Access?” (2001) Journal of Industrial Economics, Vol. XLIX,
No. 3 (September), 299–318.
72 “As Chief Justice Earl Warren wrote more fifty years ago, and as the federal courts have consistently ruled
since, the focus of our law is on protecting ‘competition, not competitors.’” (Leibowitz Opening Remarks)
23. Is There a Market for Organic Search?
Page 23 of 23
Thus, while it is clear that the assumed refusal to deal by Google would hurt the excluded
competitor, it is difficult to conceive of a way in which assumed refusal to deal harmed that
unaffiliated competitor’s ability to compete or harmed competition in the assumed vertical-
search relevant market.
VII.C. Whether Google’s assumed refusal to deal made business sense
only if it injured the unaffiliated business’s ability to compete
Suppose that Google considers whether to preferentially elevate the listing for a Google-
affiliated business higher than it would be listed if that business were instead unaffiliated
with Google, and that this disadvantages an unaffiliated business that competes in the same
assumed relevant market for vertical search.
Further suppose that Google judges that the introduction of this non-neutrality into the
organic search results will (a) disadvantage its rival but (b) will not restrain the competitor’s
ability to compete with Google in the vertical-search relevant market.
In light of this further supposition, we would conclude that Google’s introduction of non-
neutrality into the organic search results constitutes competition not exclusionary behavior.
Thus, a relevant question is whether Google’s assumed refusal to deal would make
business sense for Google even if the unaffiliated competitor remained a viable competitor
in the vertical-search market.
We discussed Google’s incentives to introduce such non-neutrality above in section V.
Google’s decision as to whether to introduce non-neutrality—assuming that non-neutrality is
even necessary to justify featuring Google’s affiliated business prominently73
—depends upon
the extent to which, if at all, the unaffiliated business is more relevant to the query than is
the Google-affiliated business and upon how much the greater prominence of a non-neutral
display of the Google-affiliated business would benefit Google’s affiliated business but
possibly harm its search-advertising business.
If Google were to non-neutrally favor its vertical-search business, the question would be
whether the above assessment critically relied on expected harm to the excluded unaffiliated
business’s ability to compete, or whether Google’s assessment would have been the same
even if the unaffiliated business would remain viable.
73 If Google’s vertical-search business is just as relevant to the query as is the unaffiliated vertical-search
business, Google’s algorithms would appropriately display the link to Google’s vertical-search business
more prominently than the link to the unaffiliated business would be displayed, and this result would not
require non-neutrality.