Wettbewerbspolitischer Handlungsbedarf bei der Verknüpfung von zweiseitigen Märkten im Internet: Der Fall Google

Competition policy and vertical integration in internet-based two-sided markets: the Google case

Sebastian Engelhardt (), Andreas Freytag () and Volker Köllmann

MPRA Paper from University Library of Munich, Germany

Abstract: We discuss competition effects and possible regulation of vertical integration in internet-based two-sided markets against the background of the ongoing antitrust allegations against Google. In such markets, network effects and economics of scale often lead to dominating companies which are integrated over several markets. Although implying efficiency gains, the (dynamic) network effects and economics of scale may also create significant barriers to entry. These barriers of entry can be lowered if entrants can appropriate (parts of) the dynamic effects accumulated by the incumbents. At the same time, such externalities reduce incentives to invest in dynamic effects in the first place. Measures by firms that deter multi homing, increase switching costs or create incompatibilities are anti-competitive and should thus be prohibited. Systematic top listing of own products in the search results can leverage market power and reduce competition. However, there is yet no appropriate economic theory on the power’ of search engines. The often used concept of ‘search neutrality’ is not convincing.

Keywords: two-sided markets; Internet; Google; market power; competition policy (search for similar items in EconPapers)
JEL-codes: L13 L42 L50 L86 (search for similar items in EconPapers)
Date: 2012-12-18
New Economics Papers: this item is included in nep-com, nep-ger, nep-ict and nep-net
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Journal Article: Wettbewerbspolitischer Handlungsbedarf bei der Verknüpfung von zweiseitigen Märkten im Internet: Der Fall Google (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:43326

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