Focus Areas:    Competition | monopolization | search bias | Single Firm Conduct

A Critical Assessment of the Latest Charge of Google’s Anticompetitive Bias from Yelp and Tim Wu

ICLE Antitrust & Consumer Protection Research Program White Paper 2016-3 (September 19, 2016) View Original

Summary

Late last year, Tim Wu of Columbia Law School (and now the White House Office of Management and Budget), Michael Luca of Harvard Business School (and a consultant for Yelp), and a group of Yelp data scientists released a study claiming that Google has been purposefully degrading search results from its more-specialized competitors in the area of local search.  The authors’ claim is that Google is leveraging its dominant position in general search to thwart competition from specialized search engines by favoring its own, less-popular, less-relevant results over those of its competitors:

To improve the popularity of its specialized search features, Google has used the power of its dominant general search engine. The primary means for doing so is what is called the “universal search” or the “OneBox.”

This is not a new claim, and researchers have been attempting (and failing ) to prove Google’s “bias” for some time. Likewise, these critics have drawn consistent policy conclusions from their claims, asserting that antitrust violations lie at the heart of the perceived bias.

But the studies are systematically marred by questionable methodology and bad economics. The primary difference now is the saliency of the “Father of Net Neutrality,” Tim Wu, along with a cadre of researchers employed by Yelp (one of Google’s competitors and one of its chief antitrust provocateurs ), saying the same thing in a new research paper, with slightly different but equally questionable methodology, bad economics, and a smattering of new, but weak, social science.

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