Is the Google Platform a Two-Sided Market?

Luchetta, Giacomo

doi:10.2139/ssrn.2048683

Cited by 8 publications

(3 citation statements)

References 34 publications

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“…2. The application of the 'multi-sided market' concept to search engines is not uncontested (Luchetta, 2012;Pollock, 2010), but this debate is largely internal to economics. 3.…”

Section: Fundingmentioning

confidence: 99%

Conflicts of interest and incentives to bias: A microeconomic critique of Google’s tangled position on the Web

Rieder

Sire

2013

New Media & Society

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Media scholars have studied and critiqued search engines-and in particular the dominant commercial actor, Google-for over a decade. Several conceptual and methodological problems, such as a lack of technological transparency, have made a detailed analysis of concrete power relations and their effects difficult. This paper argues that a microeconomic approach can aid media scholars in examining the complex interactions that underpin the dynamics of information visibility unfolding around the Google search engine. Using the concept of a 'three-sided market', we characterize the business model built around google.com as the foundation of the company's success. We then argue that the combination of search and advertising services, and in particular advertising network services, creates powerful incentives to orient the results page in self-serving ways, leading to fundamental conflicts of interest exacerbated by Google's dominant position in both markets. Based on search engines' mass media-like capacity to shape public discourse, we consider the identification of economic forces both as a prerequisite for a robust critique of the current situation and as a starting point for thinking about regulatory measures.

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“…2. The application of the 'multi-sided market' concept to search engines is not uncontested (Luchetta, 2012;Pollock, 2010), but this debate is largely internal to economics. 3.…”

Section: Fundingmentioning

confidence: 99%

Conflicts of interest and incentives to bias: A microeconomic critique of Google’s tangled position on the Web

Rieder

Sire

2013

New Media & Society

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“…Some economists may argue that platform companies like Google are not multisided. Luchetta (2013), for instance, argues that the relevant market of concern for policy makers should not be the online search market, but the whole market for personal information, a market in which Google is not (yet) dominant.…”

Section: Evidence On Market Dynamics Of Digital Platformsmentioning

confidence: 99%

The public’s interest in intermediaries

Mansell

2015

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Purpose: The paper examines recent developments in European policy debates concerned with whether governments should intervene in the digital intermediary marketplace to protect the public's interest.Design/methodology/approach: The paper discusses the public's interest in the evolution of the digital intermediary marketplace, it considers the economics and policy literature on the case for policy intervention in the market dynamics of digital platforms, and it examines the extent to which policy makers in Europe are catching up with changes in the market for digital platform services. Findings:It is argued that policy makers need to broaden the evidence-base upon which they consider whether policy intervention is needed beyond economic analysis. This is essential to ensure the European digital intermediary marketplace develops in line with economic, social and cultural goals.Research Implications: The case is made for measures to ensure continuous and integrated monitoring of developments in the digital marketplace based on economic indicators and evidence on the diversity of media content. Practical implications:Suggestions are made about the need for innovations in the way policy makers develop the required evidence-base for their decisions. Social implications:The paper draws attention to the need for proactive policy making based on a consideration of economic, social and cultural goals to ensure that digital intermediaries are held accountable.Originality/Value: The paper provides a multidisciplinary perspective on the dynamics of the digital intermediary ecology and assesses the extent to which the European digital market strategy provides an integrated initiative that is likely to be implemented.

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“…Its mistake lies in the fact that the EU disregarded the wider commercial motivations for supplying the free product: recouping investments in another, interconnected market (on-line advertising), the demand for which grows with the number of users of Google's services. 128 Disregarding the product's two-sided market, and its cross-network effects, the court possibly prevented a welfare-increasing business strategy. 129 Furthermore, observe that a formalistic application of the EU rule to "real" free goods, might also reach a conclusion of illegality, despite the fact that the negative welfare effects of such conduct rarely occur.…”

Section: Predatory Pricingmentioning

confidence: 99%