Is the Google Platform a Two-Sided Market?

Giacomo Luchetta

Mercato Concorrenza Regole, 2013, issue 1, 83-118

Abstract: Probably not. Unlike other platforms, such as operating systems, credit cards, or nightclubs, where a single transaction is performed via the platform, two different transactionstake place on Google. Users look for search results in exchange of personaldata, 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 eitherof the two sides were missing, search engines (like Tv or newspapers) can exist underdifferent market configurations. Indeed, in search engines network externalities runonly from the number of users to advertisers, and not the other way around. Buildingupon this analysis, a non-bilateral construction of the relevant market where Googleoperates is proposed. Google operates as a retailer of users' personal information. Inthe upstream market, it buys users' personal information from large retailers and finalconsumers in exchange of search services or upon monetary payment. Then, it usesthe personal information collected to sell targeted advertising to advertisers in thedownstream market. Based on this market construction, the allegations against Googleare analysed as alleged violations of competition law along this vertical chain.

Keywords: Google; two-sided market; dominant position; search engine. (search for similar items in EconPapers)
Date: 2013
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