Giacomo Luchetta

Is the Google Platform a Two-Sided Market?

  • Abstract

Informations and abstract

Keywords: Google, two-sided market, dominant position, search engine.

Probably not. Unlike other platforms, such as operating systems, credit cards, or night clubs, where a single transaction is performed via the platform, two different transactions take place on Google. Users look for search results in exchange of personal data, while advertisers look for users' attention, i.e. to be matched with the «right» user. Whilst operating systems, credit cards, and night clubs would be meaningless if either of the two sides were missing, search engines (like Tv or newspapers) can exist under different market configurations. Indeed, in search engines network externalities run only from the number of users to advertisers, and not the other way around. Building upon this analysis, a non-bilateral construction of the relevant market where Google operates is proposed. Google operates as a retailer of users' personal information. In the upstream market, it buys users' personal information from large retailers and final consumers in exchange of search services or upon monetary payment. Then, it uses the personal information collected to sell targeted advertising to advertisers in the downstream market. Based on this market construction, the allegations against Google are analysed as alleged violations of competition law along this vertical chain.

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