Non‐neutrality of search engines and its impact on innovation

Abstract

The search neutrality debate is about whether search engines should or should not be allowed to uprank certain results among the organic content matching a query. This debate is related to that of network neutrality, which focuses on whether all bytes being transmitted through the Internet should be treated equally. In a recent paper, we have formulated a model that formalizes this question and characterized an optimal ranking policy for a search engine. The model relies on the trade-off between short-term revenues, captured by the benefits of highly paying results, and long-term revenues which can increase by providing users with more relevant results to minimize churn. In this article, we apply that model to investigate the relations between search neutrality and innovation. We illustrate through a simple setting and computer simulations that a revenue-maximizing search engine may indeed deter innovation at the content level. Our simple setting obviously simplifies reality, but this has the advantage of providing better insights on how optimization by some actors impacts other actors. KEYWORDSinnovation, neutrality, revenue maximization, search engine INTRODUCTIONThere is an ongoing public debate about search neutrality for the Internet. Recently, some search engines (SEs) have been under scrutiny by individuals, organizations that oversee the Internet, and regulators in various countries because the organic search ranking is not only based on measures of relevance but is also influenced by revenue considerations. 1 For example, Google could favor YouTube and other content of its own because of the extra revenue generated from keeping users within their ecosystem of pages and services. Extra revenue relates mainly to additional ads that users are more likely to click. Bias in organic search ranking has been observed in experiments.2-4 In Reference 4, for example, it was reported that Microsoft-owned content was 26 times more likely to be displayed on the first page of Bing (owned by Microsoft) than with any other SE, and that Google content was 17 times more likely to appear in a Google Search first page than with other SEs. These issues are of interest to governments and regulators, such as the US Federal Trade Commission, 5 the US Senate, 6 and the European Union. For instance, in June 2017, European antitrust officials fined Google 2.7 billion dollars in a lawsuit about search neutrality. 7The crucial question is whether a SE should only base its ranking on link relevance, and whether a non-neutral SE could hurt the Internet economy by hampering competition and innovation by favoring content providers that can afford higher fees. The consequence may be that new applications/content may have a harder time reaching the top positions of search rankings, which would limit their distribution and their chances of being successful. The underlying question relates to other policy debates about whether and how to regulate the Internet, the most prominent example being the net neutrality debate. 3,8 In Reference 9, w...

On the potential of Google AMP to promote local content in developing regions

“…The fact that third party content is now within the realm of Google, the search engine can choose to prioritise which content end-users should see first, at the detriment of non-AMP enabled web pages. This situation further raises questions of centralisation of data and search neutrality [16].…”