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International Reactions to Google’s Adwords

We see in this article that some people can receive adverse effects of the ad policy that Google has adopted regarding advertisers.  This article features a case filed by the firm Bharat Matrimonial which is filing a case against the Indian government regarding Google’s Adwords policy which it finds restrictive and discriminatory. According to this firm, we see that Google has been selling keywords that they sold to the rivals of Bharat Matrimonial such as Shaadi.com. The firm Bharat Matrimonial feels that the right to the key words that they pay for should be owned totally by them and by selling them key words to other firms the search will be corrupted as their name might not be at the top slot when a person is searching using the key word. This is certainly a problem and the Indian government, which firmly believes in maintaining business competition, wants to deal with this case just like it does with the many other anti-competition cases it deals with against Google.

We see here that there is a problem with the GSP (generalized second price) auction that has been set up to make sure that the advertisers get the slots on the search that they value. Google India is trying to increase the total revenue they bring to the firm by selling the search to other firms in order to maximize their revenue. If they did this, this would disrupt the generalized second price auction because the price of the slot that Bharat Matrimonial is paying for is the harm that the firm causes by taking the slot. By selling the slot to others as well, we see that other firms such as Shaadi.com can increase their value by sometimes getting the top slot in searches due to the same key word. This is, thus not a Nash equilibrium, which is why this compliant is being filed.

Link: http://articles.economictimes.indiatimes.com/2012-02-03/news/31021453_1_adwords-google-india-competition-act

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