Antitrust Issues in Multisided Markets: Google

1. Antitrust Issues in Multisided Markets:Google Antonio Buttà Rome, 6 May 2011 Recent Developments in Competition Enforcement

2. “For me, Microsoft is so last century.They are not the problem.I think we are going to continually see a problem,potentially, with Google” Christine Varney, 2008 In 2009 appointed head of the Justice Department’s antitrust division in the U.S.

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5. Site owners Site owners Ads AdSense Search engine Search ads Advertising platform AdWords Users Advertisers Google’s platform Google Maps Google News YouTube Google Books Picasa … Other services Users

6. Google’s financials

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8. Case A420 – Google News • Google News • Google News is a computer-generated news site that aggregates headlines from news sources, groups similar stories together and displays them according to each reader's personalized interests • Google News allows users to search among online news, but it is more than a search tool • It is a form of online press review, which is continuously updated and, to a certain extent, can satisfy by itself users’ demand for news updates • Publishers’ control over their own content displayed on Google News • Publishers can use Google’s crawler to define restrictions that apply to Google News • Any such restriction, however, would apply also to Google Web Search

9. Case A420 – Google AdSense • Terms and conditions of general online contract • The share of the revenue that the publisher receives is determined by Google from time to time in its absolute discretion • Google does not (have to) tell the publisher how it works out that share or what percentage of the pertinent total advertising revenue earned by Google that share represents • Google can change its pricing and/or payment structure at any time in its absolute discretion • Publishers’ bespoke contracts • Revenue-sharing split is explicitly agreed upon • No information/tool that allows publishers to monitor and verify Google’s intermediation activity

10. Case A420 – Google’s commitments • Google News • Specific “crawler” that allows publishers to use the standard robots.txt to define ex-ante restrictions on content aggregated by Google News: restrictions do not affect Google Web Search • Restrictions can be defined at different levels of granularity • Google AdSense • Transparency of revenue sharing • Changes to revenue sharing become effective only after affiliated publisher is informed • Third-party software can be used by publishers to monitor clicks on AdSense ads

11. Around the world • France • Autorité de la concurrence: Google has implemented the content policy of it AdWords service in a way that lacks objectivity and transparency, resulting in a discriminatory treatment of speed camera database suppliers • Germany • Complaints from newspaper and magazine publishers over Google’s use of their editorial content • Complaints from competing providers of online services (maps): Google is unfairly promoting its own services in the results of its search engine • Texas, Ohio • Investigations over Google’s business practices • South Korea • Complaint by internet providers: Android smartphones have Google’s search engine installed as a default and are designed to make it virtually impossible to switch to another option

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13. The investigation by the European Commission • The demotion of competing online vertical search services in Google’s natural search ranking and the preferential treatment of Google’s own online vertical search services • The demotion of the Quality Score of competing vertical search services using Google’s AdWords platform • The imposition of exclusivity obligations on publishers participating in Google’s AdSense programme • The imposition of restrictions on the storage and use of advertisers’ AdWords campaign data with regard to competing online advertising platforms

14. Microsoft’s complaint to the European Commission • Google bars competitors from accessing its YouTube video site for search results and has kept phones running Microsoft’s operating system from working properly with YouTube • Google also has signed contracts that block top European websites from distributing rival search boxes • Google is also restricting its own advertisers from accessing the data they put in Google servers as part of ad campaigns

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16. An overview of competition concerns regarding Google Site owners Site owners Ads Other services Search engine Search ads Advertising platform Users Users Advertisers

17. Conclusions • Innovation, dynamic markets and dominant position: (when) will Google be “last century”? • Competition concerns have been raised on various sides of Google’s platform, but most stem from Google’s position in the provision of web search services • What are the prospects for competition in web search? • In the absence of strong platform competition, where is the boundary between search services and searched content?

18. “We used to have Yahoo Finance first and now is Google first… ...when we rolled out Google Finance, we did put the Google link first. It seems only fair, right, we do all the work for the search page and all these other things, so we did put it first. That's actually been our policy since then …” Marissa Mayer, 2007 Google Vice President Search Products & User Experience