Does Google Hold a Dominant Market Position? – Addressing the (Minor) Significance of High Online User Shares

Ifo Schnelldienst 16/2014, 7

7 Pages Posted: 12 Sep 2014 Last revised: 15 Jul 2017

See all articles by Christian Kersting

Christian Kersting

Heinrich Heine University Düsseldorf - Faculty of Law

Sebastian Dworschak

Heinrich-Heine University Düsseldorf - Faculty of Law

Multiple version iconThere are 2 versions of this paper

Date Written: September 12, 2014

Abstract

Die deutsche Version dieses Artikels finden Sie unter: https://ssrn.com/abstract=2495303.

In Germany many observers argue that Google is a dominant undertaking under the competition laws and is therefore potentially able to hinder, discriminate or exploit other market participants. This assumption is mainly based on Google’s high share of users in online searches. Closer examination, however, casts doubt on this assumption. It grossly overestimates the significance of Google’s user share and ignores many additional factors that are relevant to the assessment of Google’s market position: as users may use Google’s service free of charge, it is already questionable if there is a market for online searches for competition law purposes. Even presuming the existence of such a free market, regulatory precedent to-date has held that high shares of users in "markets" for free products or services only have little significance in the assessment of an undertaking’s market position. Furthermore, Google’s high user share in general search is only ephemeral and subject to constant change. As users can switch to a wide range of competitors in the market, such as Microsoft Bing, Yahoo! or specialized search engines like Amazon or eBay, with ease, Google is forced to re-invent itself on a daily basis in order to maintain its user share. Taking also into account the absence of direct network effects and the enormous pressure to innovate in this market, the authors finally conclude that Google is not dominant under the competition laws.

Keywords: Google, dominance, dominant, market dominance, user share, competition law, antitrust law, switching costs, network effects, search engine

JEL Classification: K21, K29

Suggested Citation

Kersting, Christian and Dworschak, Sebastian, Does Google Hold a Dominant Market Position? – Addressing the (Minor) Significance of High Online User Shares (September 12, 2014). Ifo Schnelldienst 16/2014, 7. Available at SSRN: https://ssrn.com/abstract=2495300

Christian Kersting

Heinrich Heine University Düsseldorf - Faculty of Law ( email )

Universitätsstr. 1
Düsseldorf, D-40225
Germany
0211 8111660 (Phone)

Sebastian Dworschak (Contact Author)

Heinrich-Heine University Düsseldorf - Faculty of Law ( email )

Universitätsstr. 1
Düsseldorf, D-40225
Germany
+49 211 81-11373 (Phone)

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