Antitrust Analysis On Search Engine Paid Listing

With the development and popularization of Internet, online advertising has achieved an unprecedented development, search engine operators as a carrier of online advertising is also achieved rapid development. Online advertising has become the main source of income for search engine. But the search engine operators generally adopt the paid listing mechanism, the mechanism itself is very controversial, and the high degree concentration of the search engine market causes the focus of antitrust authorities. This paper will take this as a starting point, firstly, analyzing the influence of paid listing mechanism about search engine operators, now most search engine operators widely use paid listing mechanism, so then we discuss whether the leading search engine operator abuse their market power or not, whether it is because of market force that made the paid listing mechanism need antitrust agency concern, finally provide policy recommendations for the antitrust organization.The current search engine operators generally adopt the mechanism of paid listing to rank advertisers, this thesis starts from the paid listing mechanism, compared with natural selection algorithm, analyzes the price and service quality of search engine operator under paid listing. Then combined with the learning effect of operators, under paid listing mechanism background, analyzes the price and service quality of search engine operators in monopoly and asymmetric duopoly situation. Finally, combined with case analysis, uses the investigation of the European Commission on Google as background, further analyzes whether the search engine operator in dominant place means abuse of market power.Through the research we find that the search engine operator with paid listing mechanism will provide four kinds of equilibrium:high price high quality, high quality low price, low quality and low price, high price low quality. Only in high price low quality circumstance need antitrust intervention. For the search engine operators who use paid listing mechanism, with the introduction of learning effect, the price and service quality when the monopoly search engine maximize its profit are higher than the optimal level of social welfare This means, at least for the users, the search engine market monopoly is not a bad thing. In the asymmetric duopoly situation, market competition will lead to the emergence of three kinds of equilibrium. The leading operator with high quality low price or high quality high price does not need too much intervention of antitrust authorities. Only in low quality high price circumstance need antitrust intervention. Finally, combined with case analysis, we analyze the dominant search engine operator behavior such as signing exclusive terms with advertisers, manipulating search results and excessive pricing. This paper thinks that the search engine operator in market dominant position does not mean abuse of market power, the antitrust authorities should analyze according to the specific circumstances.