Vertical Integration and Antitrust in Search Markets

66 Pages Posted: 23 Sep 2015 Last revised: 21 Dec 2017

See all articles by Lesley Chiou

Lesley Chiou

Occidental College - Department of Economics

Date Written: November 21, 2016

Abstract

This paper studies the integration of an upstream firm in the market for Internet search with downstream services. In 2011, Google integrated its comparison site for flight fares (Google Flights) and restaurant ratings (from a recent acquisition of Zagat) into Google's search results. I find that Google's integration of Google Flights led to a reduction in clicks to competing travel agencies for general searches. The acquisition of Zagat's restaurant ratings led to an increase in clicks, regardless of the content of the search term. The contrasting findings may be explained by the fact that Google Flights provides price information and therefore directly competes with other online travel agents while Google Zagat provides quality information, which may encourage more search on competing review sites.

Keywords: antitrust, tying, online, Internet, consumer search, vertical integration, Google

JEL Classification: L40, L86

Suggested Citation

Chiou, Lesley, Vertical Integration and Antitrust in Search Markets (November 21, 2016). Available at SSRN: https://ssrn.com/abstract=2663557 or http://dx.doi.org/10.2139/ssrn.2663557

Lesley Chiou (Contact Author)

Occidental College - Department of Economics ( email )

1600 Campus Road
Los Angeles, CA 90041
United States

HOME PAGE: http://www.faculty.oxy.edu/lchiou

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