Multilateral Platforms and Google Book Search: Which Competition After the Settlement Agreement?

Daria Ciriaci and Davide Quaglione

L'industria, 2009, issue 4, 647-678

Abstract: The Google Books Search initiative, and the possible anticompetitive effects implied by the approval of the Settlement Agreement (SA) are worldwide debated issues. The scarce and embryonic literature on the topic, as well as the Antitrust Division of the Department of Justice, adopted a traditional analysis framework to stress the possible anticompetitive effects of the SA, focusing on the ebooks market, the orphan-work issue and the post-settlement scenario. However, we believe that to correctly assess the possible anticompetitive effects of the SA both the multilateral platform nature of Google (it dominates the search advertising industry) and the significant network effects generated providing complementary products and services (i.e. ebooks, ebook readers, drm systems) must be considered. When this framework is applied, Google's incentives scheme changes and the anticompetitive threats associated to the SA significantly slim down. It is unlikely, in fact, that Google will impose monopolistic prices to access to the Google Book services as its aim is to attract many users to attract advertisers. However, even though the social benefits of the Google Book Settlement are significant, modifications of the SA are needed to limit Google's ability to monopolize complementary product markets.

Keywords: Google Book Search; Orphan Works Monopoly; Settlement Agreement; Multi-sided Platforms; Network Effects; Anticompetitive Behaviors (search for similar items in EconPapers)
Date: 2009
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