India’s anti-trust watchdog Feb. 08 fined US-based search giant Google(pdf) Rs1.
ID: 2429441 • Letter: I
Question
India’s anti-trust watchdog Feb. 08 fined US-based search giant Google(pdf) Rs1.36 billion ($21 million), or about 5% of the average total revenue from its India operations, for “search bias.”
The Competition Commission of India (CCI) focused on Google’s commercial flight search function. The box, which advertisers can pay to be featured in, is usually displayed prominently in Google’s search results when a user searches for a flight or airline through the main search engine.
It shows sample rates from certain airlines based on the user’s query, and allows users to enter their travel dates and route for more targeted results. On selecting “search flights,” users are taken to the Google Flights search page which links to airline and other sites where bookings can be made.
The CCI found that the “disproportionate real-estate” given to the flight unit unfairly pushed down or pushed out other travel sites in India that rely on search engines to reach travellers, it said in a 190-page order(pdf). CCI also said that Google was being unfair to users by leading them to Google Flights, which may leave them “devoid of additional choices of results.” The watchdog called for clearer labeling of the link.
The order was in response to a 2012 complaint filed against Google by Matrimony.com and Consumer Unity & Trust Society.
The investigation looked at other aspects of Google’s search business, including its OneBox design—the boxes that call out results from Google’s specialised search pages, like images, videos, or news, within the main page of results—advertising service AdWords, and online-distribution agreements. It did not find any wrongdoing on those fronts.
“The Competition Commission of India has confirmed that, on the majority of issues it examined, our conduct complies with Indian competition laws,” a Google spokesperson told Quartz. “We are reviewing the narrow concerns identified by the commission and will assess our next steps.”
India’s order against Google is a slap to the search giant that has faced monopoly troubles around the world. Last year, a record anti-trust finewas imposed on it over its shopping service by the Europe Commission, which is also investigating whether Google’s Android mobile operating system and AdSense platform give it an unfair advantage. It’s also facing anti-trust probes in places like Brazil.
https://qz.com/1202551/google-anti-trust-india-comes-down-on-flight-searches-results/
i) Would you consider Google a monopoly in the internet search market? Explain?
ii) Would you consider Google a monopoly in the internet search advertising market? Explain?
iii) Would you expect any deadweight loss in part i), what about ii)?
iv) Explain how consumers lose from Google's monopoly on search if they pay a price of $0 to search? Is this a failure of the basic monopoly model or a failure of specifying the market where deadweight loss has occurred from Google's monopoly power?
Explanation / Answer
i) Yes , Google has monopoly in internet search market. This is because other search engines such as bing, safari share only a small market among themselves that too very small.
ii) Yes, since Google has huge market share in internet search market so almost all firms want to advertise their post on Google and hence this adds to Google monopoly power in internet search advertising market.
iii) Yes, dead weight loss occurs to consumer in form of most affordable deal forgone. Google is advertising the adds of companies which are paying it higher fees . There are companies which have better deals for consumers but doesn't appear in search results due to inability to pay exorbitant fee charged by Google.
iv) Consumer didn't pay for the searching on Google. They lose because they are unable to fix a deal which is more favorable to them in comparison to deal offered to them . In this case market failure occurs because of monopoly pricing power to seek more more profits. Monopolist is charging higher prices because it has monopoly power .