Newsletter

What should be done about Google’s quasi-monopoly in search?

Publishing date
10 July 2023
Authors
Bertin Martens
Picture of a stack of newspapers
Picture of the title of the 06/07/2023 newsletter with Bertin Martens

Google’s dominant position in online search may distort services markets that depend on referrals from search engines. The EU Digital Markets Act seeks to tackle the root cause of platforms’ dominance: network effects. Network effects occur in search engines because more users generate more data that improve the quality of search and attract even more users to that search engine. The DMA seeks to break that data feedback loop by forcing very large “gatekeeper” search engines like Google to share user data with smaller search engines.  

Asymmetric data sharing stimulates competition but also fragments the user dataset that search engines can access. Empirical evidence suggests that this reduces the quality of search, especially for rare keyword searches. Symmetric data sharing, irrespective of size, could reduce that tension between competition and consumer welfare objectives.  

Recent advances in Generative AI, such as ChatGPT, open a new competition frontier in search. Search engines produce a list of webpages; users have to extract a reply from these pages. Chatbots produce a natural language reply to queries, based on the contents of relevant webpages. They are pre-trained on webpages and do not depend on network effects and user feedback. That facilitates competition. Chatbot replies are not always reliable and may require human verification, using relevant webpages. As such, chatbots and search engines complement each other. The DMA search data sharing obligation may still be useful because it can strengthen that interaction, provided it does not reduce the quality of search.

 

The Why Axis is a weekly newsletter distributed by Bruegel, bringing you the latest research on European economic policy. 

Sign up for the newsletter. 

Relevant publication:

B. Martens (2023) ‘What should be done about Google’s quasi-monopoly in search? Mandatory data sharing versus AI-driven technological competition’ Working Paper 10/2023, Bruegel, available here.

About the authors

  • Bertin Martens

    Bertin Martens is a Visiting fellow at Bruegel. He has been working on digital economy issues, including e-commerce, geo-blocking, digital copyright and media, online platforms and data markets and regulation, as senior economist at the Joint Research Centre (Seville) of the European Commission, for more than a decade until April 2022.  Prior to that, he was deputy chief economist for trade policy at the European Commission, and held various other assignments in the international economic policy domain.  He is currently a non-resident research fellow at the Tilburg Law & Economics Centre (TILEC) at Tilburg University (Netherlands).  

    His current research interests focus on economic and regulatory issues in digital data markets and online platforms, the impact of digital technology on institutions in society and, more broadly, the long-term evolution of knowledge accumulation and transmission systems in human societies.  Institutions are tools to organise information flows.  When digital technologies change information costs and distribution channels, institutional and organisational borderlines will shift.  

    He holds a PhD in economics from the Free University of Brussels.

    Disclosure of external interests  

    Declaration of interests 2023

Related content