Google gilt als fast Monopolist im Bereich der Suchmaschinen. Diese Seminararbeit betrachtet dabei, ob Google seine Macht ggf. ausnutzt im Wettbewerbsrecht. Dies wird besonders anhand des §102 TFEU analysiert.
“Googeln” is a common verb you can look up in the German encyclopedia Duden nowadays (BI). Google is a very well known player, not only in the market for search engines,
that made it possible throughout the last decade to increase its revenue to nearly 45 billion $ in 2012 (REV). While 14 years ago there were about 10.000 Google searches a day, nowadays this number is reached within one-hundredth of a second (STA). All the information gained is extremely valuable for advertisers that use Google AdWords to place consumer matched advertisement. This is also one of the reasons consumers can enjoy products such as internet searches without any charge and therefore might not notice if a player, such as Google, abuses its dominance since it can’t be done through
excessive pricing.
In the beginning of 2010 eJustice, Ciao and Foundem, three price comparison websites, claimed that Google has been downgrading their websites in the search results (Brian 2013). All three are so-called vertical search engines, which deal with specific content, such as flights/hotels “[…] rather than dealing with general search requests.” (Van Loon 2012, p. 16). As a result, the EU announced the opening of an antitrust investigation
against the search engine pioneer in November 2010. Here the EU will examine whether Google might violate the European competition law (§102, TFEU, 2007); the abuse of a dominant position. Just one month ago, Joaquín Almunia, the EUs competition commissioner rejected Google’s second offer to settle the investigation (FT). If the accusations
prove to be correct the firm might face fines up to 5 billion $ (Brian 2013). It is going to be especially interesting to find out the importance of Google’s first of a kind advantage, as it was the first search engine to introduce the so-called ‘Page Rank’ algorithm, which increased the search results accurateness.
Nonetheless, according to §102 TFEU, there are two conditions that a have to be analyzed before: The relevant market and the existence of a dominant position. Therefore I am going to present the economic theory and methods which are relevant and then apply these to Google. After that I will examine whether Google is abusing its dominant position in order to draw an answer to the question.[...]
Table of Contents
1 Introduction
2 Relevant Market
2.1 Theory
2.2 Google
3 Dominance
3.1 Theory
3.2 Google
4 Abuse of dominance
5 Conclusion
Objectives and Topics
This paper examines whether Google abuses its dominant position in the search engine market by applying the framework of European antitrust law and §102 TFEU to assess market definition, dominance, and potential exclusionary practices.
- Analysis of the relevant product and geographical search engine market.
- Evaluation of Google's market dominance using economic indicators like the Herfindahl Index.
- Investigation into potential exclusionary abuses, such as vertical search result downgrading.
- Examination of tying, bundling, and exclusive dealing practices within the search advertising ecosystem.
Excerpt from the Book
3.2 Google
It is hard to apply the Lerner index since consumers enjoy each search without any direct charge and the suppliers do not have additional cost when another customer is using their search algorithm. For that reason, I will not be able to apply the Lerner index to this market.
With regard to the market shares presented in chapter 2.2, Google has a share of around 90% and is clearly over the barrier of 33% explained in 3.1. Therefore it should be classified as dominant. However, having a high market share isn’t sufficient. As a next step, the data in diagram 1 will be used to determine the Herfindhal Index: 91,4² + 2,7² + 1,1² + 0,9² + 0,9² + 0,5² + 2,5² = 8370. Compared to the barrier of 1.800, this market is extremely concentrated. Google’s enormous market share is reflected as the other search engines all share a very small part of the market. Concluding it can be said, that as well market share and the Herfindahl Index indicate Google’s strong dominance in the search engine market.
In 2012 Google accounted a revenue of more than 43 billion $ from advertisers only (REV). Important to mention is that their actual revenue is even higher due to their many different services, such as a social network (Google+), Mail (Gmail), etc. Hereby an user is automatically registered as a member of Google+ if he signs up for a Gmail account. This is a form of bundling that enables Google to achieve a higher user rate and then throughout cross-side network effects attract more advertisers. This leads to higher profits. Regarding the search engine, Google then can use these additional resources to further modify and improve its algorithm and as a consequence attract even more users. This cycle strengthens Google’s dominance.
Summary of Chapters
1 Introduction: Provides an overview of Google's rise in the search market and introduces the antitrust investigation by the EU concerning potential abuse of dominance.
2 Relevant Market: Establishes the methods for defining product and geographical markets and applies them to the unique context of zero-price search engine services.
3 Dominance: Analyzes Google's market power using concentration indices and evaluates the competitive constraints within the dynamic "new economy" market environment.
4 Abuse of dominance: Examines specific allegations against Google, including potential exclusionary behaviors like search result downgrading and anti-competitive tying or bundling.
5 Conclusion: Summarizes the findings, noting that while Google is currently dominant, the dominance remains fragile due to dynamic competition, and no abuse has been definitively proven.
Keywords
Google, Antitrust, Market Dominance, TFEU, SSNIP Test, Search Engine, Herfindahl Index, Two-sided Market, Foreclosure, Bundling, Exclusive Dealing, Vertical Search, Network Effects, Dynamic Competition, Competitive Constraints
Frequently Asked Questions
What is the primary focus of this paper?
The paper examines whether Google’s behavior in the search engine market constitutes an abuse of a dominant position under European competition law, specifically Article 102 TFEU.
What are the central thematic areas?
The work covers market definition, assessment of market dominance in new economy markets, and investigation into potential anti-competitive practices like tying, bundling, and exclusionary conduct.
What is the primary research question?
The core objective is to determine if Google is abusing its dominant position in the search engine market, following the procedural steps of an antitrust investigation.
Which scientific methods are applied?
The analysis utilizes established economic models such as the SSNIP test for market definition, the Lerner Index and Herfindahl Index for measuring concentration, and theories regarding two-sided markets and network effects.
What is covered in the main body?
The body analyzes the relevant market, evaluates Google's dominance using market data, and investigates specific accusations of abuse, such as the alleged downgrading of vertical search competitors.
How is the work characterized by keywords?
The work is defined by terms such as antitrust, market dominance, two-sided markets, foreclosure, bundling, and dynamic competition.
Why is the Lerner Index difficult to apply to Google?
Because the price for web searches for consumers is zero, the traditional calculation of the Lerner Index, which requires price and marginal cost data, cannot be effectively utilized.
What does the author conclude about Google's dominance?
The author concludes that while Google is clearly dominant in terms of market share, it is a "fragile" dominance subject to strong dynamic competitive constraints and potential future shifts in the market.
- Citar trabajo
- Mark Notkin (Autor), 2014, Does Google abuse its dominant position in the search engine market?, Múnich, GRIN Verlag, https://www.grin.com/document/272141
