Richard Bergmair's Blog


==> Ecosia explains “Why we’re saying no to Google”.

This auction doesn’t address the problem it was actually meant to address, which is to stop an anticompetitive practice. The spirit of the law concerning antitrust is that you can’t abuse a monopoly in one market to gain a monopoly in another. That’s why it wasn’t acceptable that Google’s Android would set Google to be the default search engine and offer no other options.

Now Google says to those other search engines: Hey, you can be the default. But you’re going to have to give us all your profits. How is that any less anticompetitive than what they were doing before?

Footnote: Why am I saying all of their profits? Well, it’s four slots. Google will be one of them. Microsoft and Yahoo will bid whatever it takes to be on the list. – Now there’s one slot left for everyone who isn’t part of the existing search oligopoly, like Ecosia, Qwant, or DuckDuckGo.

Now imagine if this was open outcry: Ecosia bids X dollars. Qwant outbids them by offering X+1 dollars for that fourth slot. Well: If Ecosia knows they would still be profitable even if they had to pay X+2 dollars, that’s what they’re going to bid, right? They hit a limit only at the point where they know that the deal would turn unprofitable. The guy who gets the slot would, in open outcry, end up paying the next guy’s profit plus one dollar. But that’s not the model. They’re making sealed bids, and you’ll have to actually pay what you bid, so that’s why I’m saying all their profit.

#business#computers   |   Aug-13 2019