Does Google abuse its dominant position in the search engine market?

Mark Notkin

• Publisher: GRIN Verlag
• Year: 2014
• eBook ISBN: 9783656633594
• Edition: 0
• Topic: Business
• Subtopic: Business General
• Index: Business

Seminar paper from the year 2014 in the subject Business economics - Miscellaneous, grade: 1, 3, LMU Munich, language: English, abstract: Google gilt als fast Monopolist im Bereich der Suchmaschinen. Diese Seminararbeit betrachtet dabei, ob Google seine Macht ggf. ausnutzt im Wettbewerbsrecht. Dies wird besonders anhand des §102 TFEU analysiert. "Googeln" is a common verb you can look up in the German encyclopedia Duden nowadays (BI). Google is a very well known player, not only in the market for search engines, that made it possible throughout the last decade to increase its revenue to nearly 45 billion $ in 2012 (REV). While 14 years ago there were about 10.000 Google searches a day, nowadays this number is reached within one-hundredth of a second (STA). All the information gained is extremely valuable for advertisers that use Google AdWords to place consumer matched advertisement. This is also one of the reasons consumers can enjoy products such as internet searches without any charge and therefore might not notice if a player, such as Google, abuses its dominance since it can't be done throughexcessive pricing.In the beginning of 2010 eJustice, Ciao and Foundem, three price comparison websites, claimed that Google has been downgrading their websites in the search results (Brian 2013). All three are so-called vertical search engines, which deal with specific content, such as flights/hotels "[…] rather than dealing with general search requests." (Van Loon 2012, p. 16). As a result, the EU announced the opening of an antitrust investigationagainst the search engine pioneer in November 2010. Here the EU will examine whether Google might violate the European competition law (§102, TFEU, 2007); the abuse of a dominant position. Just one month ago, Joaquín Almunia, the EUs competition commissioner rejected Google's second offer to settle the investigation (FT). If the accusationsprove to be correct the firm might face fines up to 5 billion $ (Brian 2013). It is going to be especially interesting to find out the importance of Google's first of a kind advantage, as it was the first search engine to introduce the so-called 'Page Rank' algorithm, which increased the search results accurateness.Nonetheless, according to §102 TFEU, there are two conditions that a have to be analyzed before: The relevant market and the existence of a dominant position. Therefore I am going to present the economic theory and methods which are relevant and then apply these to Google. After that I will examine whether Google is abusing its dominant position in order to draw an answer to the question.[...]