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Vertical Integration and Antitrust in Search Markets

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  • Lesley Chiou

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.

Suggested Citation

  • Lesley Chiou, 2017. "Vertical Integration and Antitrust in Search Markets," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 33(4), pages 653-685.
    • Handle: RePEc:oup:jleorg:v:33:y:2017:i:4:p:653-685.
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    File URL: http://hdl.handle.net/10.1093/jleo/ewx005
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    Cited by:

    1. Joan Calzada & Nestor Duch-Brown & Ricard Gil, 2021. "Do search engines increase concentration in media markets?," UB School of Economics Working Papers 2021/415, University of Barcelona School of Economics.
    2. Francine Lafontaine & Margaret E. Slade, 2021. "Presumptions in Vertical Mergers: The Role of Evidence," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 59(2), pages 255-272, September.
    3. Jin, Ginger Zhe & Wagman, Liad, 2021. "Big data at the crossroads of antitrust and consumer protection," Information Economics and Policy, Elsevier, vol. 54(C).

    More about this item

    JEL classification:

    • L40 - Industrial Organization - - Antitrust Issues and Policies - - - General
    • L86 - Industrial Organization - - Industry Studies: Services - - - Information and Internet Services; Computer Software

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