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US (AntiTrUST) & EU (Competition)

US (AntiTrUST) & EU (Competition). Case Study: Google Search Engine in Europe Aimee Phelan 4/16/2014. Is Google’s Search Engine a Monopoly, harming consumers?. As of Jan 2014 Google owns 67.5% of the U.S. search engine market.

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US (AntiTrUST) & EU (Competition)

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  1. US(AntiTrUST) & EU (Competition) Case Study: Google Search Engine in Europe Aimee Phelan 4/16/2014

  2. Is Google’s Search Engine a Monopoly, harming consumers? • As of Jan 2014 Google owns 67.5% of the U.S. search engine market. • Currently, Google owns ~ 90% of the European search engine market. • Dominant firm behavior • Issue: Is Google conducting anticompetitive business practices by pushing its own services over rivals? (i.e. products, flights, restaurants being promoted by Google’s specialized search services). Google Shopping, Google places

  3. US vs. EU Legislation • Derived from European integration. • EU is more concerned with competitive opportunities for SME’s, worse-off nations and in general “fairness.” Monopolies may be necessary for economic progress. • Dominance: over 1/2 Market Share • Article 102 of the TFEU- 1957 • “Any abuse of a dominant firm position within the common market is illegal” -Ability to behave independently • Subjective, Less Technical Analysis • Derived from different statutes over time. • US antitrust law is first designed to protect consumer welfare and relies on market efficiency. • Monopoly: 2/3 Market Share • Section 5 FTC Act, 15 U.S.C. 45 • US vs Aluminum Co.Alcoa (148 F.2d 416, 2d Cir. 1945) • “Superior Skill, Foresight, Industry.” • Firm Defense of Monopoly through aggressive competitive behavior • Economic Analysis

  4. Google Search Engine Outcome • EC had 4 major concerns: 1) The search display 2) Content being taken w/o consent from rivals “scrapping” 3) Exclusivity requirements for advertisers 4) Portability of online search platform to competitors. • Feb 2014, EC has come to a settlement decision w/ google. • Complainants will be informed for comment period before being finalized. • The Allegation: “Search Bias” that Google intentionally manipulated its algorithm to exclude rivals • Jan 2013, after 19 months FTC closed the investigation, citing the product design changes had legitimate business justifications that did not harm consumers. • “The law protects competition not competitors.”- Jon Leibowitz FTC • Enforceable Commitments (legally binding) • no longer commit scrapping, or multi-home

  5. Europe Before & After Google Page Today Google W/ committed Implementation

  6. Next Steps…. • Over the last couple of years Google search engine conduct as been investigated in 7 different national competition authorities - is there a need for reform here or international mutual agreement? • Need for market testing and transparency? • EC Memo regarding Google Antitrust case: http://europa.eu/rapid/press-release_MEMO-14-87_en.htm?locale=en

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