3 ms·

Is it some form of tying? https://en.m.wikipedia.org/wiki/Tying_(commerce) https://en.m.wikipedia.org/wiki/Tying_(commerce)

s3r3nity 9y ago
Yes and no - it's using a competitive advantage in one market to drive anti-competitive / unfair practices in another market. In Google's case, they're not quite _requiring_ you to use a service they prioritize ahead of others. Hypothetical example: company A has such a large market share and super wide margins in the market for widgets, so they decide to enter the market for books and undercut all of the competition on prices. They can fund that undercutting strategy with the margin from their widget business, but it's not quite fair / competitive because of the "moat" that they've built. For the search market, it's a little less clean-cut, but I can see both sides. I am old enough to remember MapQuest back in the day as the primary mapping tool most people used, but there was a big hoopla/outcry that Google was possibly prioritizing an inferior product (Google Maps at the time) in its search rankings so that the tool could get more usage and get better, at the expense of MapQuest. At the time it was virtually impossible to prove, so it didn't go anywhere. On the other side, Google has argued that super-low switching costs exist in the search engine market, so Google doesn't _really_ have a monopoly. This is where my knowledge of anti-competitive / monopolistic law breaks down (as well as where I ethically stand as a user,) as I'm not quite sure what should determine a monopoly: the market share _alone_, or the switching costs with competitors for the consumer?
- dragonwriter 9y ago
  What normally determines a monopoly is market or pricing power—the ability to raise prices in some range without losing customers to competitors. It's plausible that Google has market/pricing power in search advertising. It's less plausible that they have that in search.

s3r3nity 9y ago

Yes and no - it's using a competitive advantage in one market to drive anti-competitive / unfair practices in another market. In Google's case, they're not quite _requiring_ you to use a service they prioritize ahead of others. Hypothetical example: company A has such a large market share and super wide margins in the market for widgets, so they decide to enter the market for books and undercut all of the competition on prices. They can fund that undercutting strategy with the margin from their widget business, but it's not quite fair / competitive because of the "moat" that they've built. For the search market, it's a little less clean-cut, but I can see both sides. I am old enough to remember MapQuest back in the day as the primary mapping tool most people used, but there was a big hoopla/outcry that Google was possibly prioritizing an inferior product (Google Maps at the time) in its search rankings so that the tool could get more usage and get better, at the expense of MapQuest. At the time it was virtually impossible to prove, so it didn't go anywhere. On the other side, Google has argued that super-low switching costs exist in the search engine market, so Google doesn't _really_ have a monopoly. This is where my knowledge of anti-competitive / monopolistic law breaks down (as well as where I ethically stand as a user,) as I'm not quite sure what should determine a monopoly: the market share _alone_, or the switching costs with competitors for the consumer?

dragonwriter 9y ago
What normally determines a monopoly is market or pricing power—the ability to raise prices in some range without losing customers to competitors. It's plausible that Google has market/pricing power in search advertising. It's less plausible that they have that in search.