Survey
* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project
* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project
Perfect competition wikipedia , lookup
Darknet market wikipedia , lookup
Digital marketing wikipedia , lookup
Affiliate marketing wikipedia , lookup
Ambush marketing wikipedia , lookup
Advertising campaign wikipedia , lookup
Television advertisement wikipedia , lookup
Advertising management wikipedia , lookup
Online shopping wikipedia , lookup
Ad blocking wikipedia , lookup
Advertising wikipedia , lookup
Search engine optimization wikipedia , lookup
Search Engines and Online Advertising: Antitrust Issues Daniel L. Rubinfeld Professor of Law and Professor of Economics, Emeritus University of California, Berkeley Professor of Law, NYU Deputy Assistant Attorney General Antitrust Division, DOJ, 1997, 1998 Conference of Western Attorneys General July 13, 2011 Overview Is Search itself an antitrust concern? Can dominance in Search cause injury? Is Online Search advertising an antitrust problem? What are the similarities and differences between U.S. v. Microsoft and current Google investigations? Search: Are there Antitrust Issues? Antitrust concerns focus on harm to customers, not on harm to competitors. Key: Do customers have choices with respect to search? Achieving success (even dominance) through the creation of a better product is pro-competitive. Does Google have monopoly power in search? Requires substantial barriers to entry Is there evidence of a high minimum viable scale? Is there evidence of a high minimum efficient scale? Requires consistently high profit margins Search is free; profit comes from advertising Focus: Online advertising Antitrust Issues (continued) What is the relevant market? Search? Online Advertising? Online Search advertising? Who is likely to be harmed? Individuals who use search engines? Those who sell advertising? Those who read ads? What are the anticompetitive practices? Offering a better search engine? Exclusive deals? Search Issues Does Google or Bing or Yahoo get paid to artificially rank search responses? Not to my knowledge. Gaming the system is a problem, but not an antitrust problem. Bing and Google and Yahoo! have an incentive to remedy these problems. Search competition generates winners and losers, but this is not an antitrust issue. Bing and Google have exclusive contracts with OEMs, but Bing has more in the way of exclusive distribution than Google. Economics of Advertising Advertising, in general, occurs in a two-sided market Two-sided markets arise when two different types of users may realize network benefits by interacting with one another through one or more platforms/mediators Examples: credit card networks, dating sites, and video games Publisher • Pays to place ad on website Advertiser • Provides free website content to consumers • Receives subsidized online content by viewing ads Viewer Economics of Advertising Cost-per impression Cost for advertiser based on the number of times the ad is displayed on a webpage (and the number of times the page is displayed) May be good for branding but does not necessarily encourage immediate sales Display is usually CPM Economics of Advertising Cost-per click Cost for advertiser based on the number of times the ad is clicked Unlike offline advertising, this pricing metric gives advertisers viewer feedback The publisher has an incentive to target the advertisement more closely to potential consumers CPC helps align the incentives of the advertiser and publisher Search is typically CPC CPC and CPM Compete High click through rate can be profitable when ads are targeted, even with a small number of exposures For low click-through rates, the publisher might prefer to sell ads that generate a lot of impressions Publishers can be expected to vary prices for CPC and CPM to the point at which the two compete. Market Definition of Online and Offline Advertising Critical Loss Question: Does online/offline advertising discipline the pricing of offline/online advertising? Offline: Would offline advertisers shift a significant portion of their advertising expenditures (to online) in response to a price increase of online advertisements by a hypothetical monopolist such that the price increase is unprofitable? Online: Would online advertisers shift a significant portion of their advertising expenditures (to offline) in response to a price increase of offline advertisements by a hypothetical monopolist such that the price increase is unprofitable? There is Competition between Online Search and Non-Search Advertising Goldfarb-Tucker (2007) – “online context-advertising competes in a broader advertising market that includes offline marketing communications channels” The FTC has viewed search and non-search as separate markets in the past, but competition has been changing at a rapid pace. Today, there is substantial competition between display (CPM) and search (CPC). Conclusions There appear to be substantial differences between Microsoft’s market power and anticompetitive behavior as proven in U.S. v. Microsoft and Google’s alleged market power and anticompetitive behavior relating to both search and online advertising. Online advertising is constrained to some extent by competition from traditional advertising media. The debate about whether search and non-search ads are likely in the same relevant market continues.