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products is viewed by many customers as particularly important and there are few relevant alternatives for that product.169

  • 334.

    On the basis of these general rules set out in the Guidelines, the notifying party has claimed that Google lacks the market power it would need to be able to foreclose rivals. More specifically, in the notifying party's view the narrowest possible relevant market is the overall market for the provision of online advertising space without any further division between search and non-search advertising space. In this broader market Google's market position is much more limited in the various Member States and in the EEA as a whole than its market position in the narrower search ad segment. According to the notifying party, in the overall online advertising market Google therefore does not have a sufficient degree of market power to be able to foreclose competitors in the ad serving market.

  • 335.

    The notifying party further argues that, even if search advertising were to constitute a separate product market, this market is a dynamic market in which market positions can change quickly as a result of new technological developments170. The notifying party points out that, in search advertising, Google faces competition from companies such as Microsoft, Yahoo! and Ask.com171, all of which have only recently developed several improvements in their search advertising services and have announced further investments and improvements relating to their search advertising offering during the coming years. In this context, the notifying party also notes that there are virtually no costs for users of search engines or advertisers associated with switching among search engines or using multiple search engines. Accordingly, the use of multiple search engines is common for advertisers172.


See paragraph 99 of the Non-Horizontal Merger Guidelines.


This is evidenced by the history of internet search. In the mid-1990s, Excite was the leading search provider. In the course of the 1990s, Excite was passed by Alta Vista. At the end of the 1990s, Lycos became the most popular search engine. Shortly thereafter, Google entered the market and quickly turned into the most-used search engine.


It should be noted, however, that Ask.com's search ads in Europe are sold by Google under a syndication agreement.


Google estimates that of its top 250 advertisers, at least 72% also advertise on Yahoo!. Apart from that, the notifying party also claims that churn rates are high, not only for competitors, but also for Google's own network, both on the advertiser and on the publisher side. According to Google, both the churn rate of publishers selling ad space via the Google network in January 2006 that did not sell ad space in December 2006 and the churn rate of advertisers using AdSense for Search (AFS) calculated as the percentage of advertisers using AFS in January 2006 that did not use AFS in December 2006, are around [20-40%]* for the EEA. Similar churn rates apply for individual EU Member States, including France, Germany, Italy, Spain and the United Kingdom. It should be noted, however, that these churn rates are based on numbers of advertisers and publishers. The corresponding churn rates in terms of revenues are lower, namely approximately [<10%]* for publishers and approximately [<20%]* for advertisers. This seems to suggest that Google lost mainly smaller publisher and advertiser customers. Apart from that, it is unclear whether these lost customers actually switched to other providers of search advertising or simply stopped using search ads.


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