Google Steps Back On Monoplizing Search Engine After Encountering Antitrust Voice From EU Pressure
https://www.wsj.com/articles/google-sweetens-search-engine-remedy-after-eu-pressure-11571849264
The article discusses how google’s monoply in search industry has caused complaint in European Union and the pressure from EU antitrust chief has forced Google to loose the screen choice on Android phones in Europe. As we learned in class and chapter 14, since there is a legion of search results after one single search, Google needs to screen out the most relevant and useful results and rank them in order. Most people only pay attention to the first page of the results, making the selection mechanism of the search engine extremely important, for it decides the information one receives. Eu has a long history of fining Google for Google’s monopoly in search industry. Espacially after UK’s brexit case. Google’s revenue also notably depends on use of its search engine on Android phones. Being confronted by antitrust chef this time will lead Google to giving back rights of choosing default search engine to Android phone users, which, according to the article, “boosted its share of mobile searches in Russia by about 10 percentage points over the following year” in a similar case in Russia. Therefore, Google said it will auction off its advertisement in pagerank to cover the lost revenue. However, unlike what we have learned during class (first-price auction and second price auction) Google will use a fourth-price-auction and also remove the minimum bid. So the winner will pay the price bidded by the fourth-highest bidder and the bidders can bid zero.This means that in many countries with less than four competitors, the cost to appear on the screen for eligible search engines would fall to zero. This will help the other search engine company to grow drastically.