The Role of Switching Costs in Antitrust Analysis: A Comparison of Microsoft and Google

By Edlin, Aaron S.; Harris, Robert G. | Yale Journal of Law & Technology, Spring 2013 | Go to article overview

The Role of Switching Costs in Antitrust Analysis: A Comparison of Microsoft and Google


Edlin, Aaron S., Harris, Robert G., Yale Journal of Law & Technology


TABLE OF CONTENTS  INTRODUCTION  I. THE ECONOMICS OF SWITCHING COSTS   A. Switching Costs and Competitive Analysis   B. Types of Switching Costs  II. THE CENTRALITY OF HIGH SWITCHING COSTS, INHERENT   AND STRATEGIC, TO THE MICROSOFT BROWSER CASE   AND OTHER ANTITRUST CASES     A. Switching Costs were Key to the Government Showing that       Microsoft had Monopoly Power     B. Microsoft Acted Anticompetitively to Increase, Maintain,       and Exploit High Switching Costs     C. Role of Switching Costs Elsewhere in Antitrust Case Law         1. Role of Switching Costs in Narrowing Market           Definition         2. Role of Switching Costs in Assessing Market Power         3. Role of Switching Costs in Exclusionary Conduct  III. A COMPARISON OF SWITCHING COSTS: MICROSOFT   WINDOWS VS. GOOGLE SEARCH     A. Comparison by Types of Switching Costs     B. Evidence of Switching Across Generalized Search Engines       (GSEs)     C. Alternatives to Generalized Search Engines for Searching         1. Evidence on Switching Between Vertical Search and           Generalized search         2. Evidence on Switching Between GSEs and Mobile           Apps         3. Evidence on Switching Between Social Media Search           and Generalized Search         4. Evidence on Arrival Rates at Websites Directly or           Indirectly, Not From a GSE         5. Evidence on Competition Between Emerging           Technologies and Generalized Search  SUMMARY AND CONCLUSION 

INTRODUCTION

Is Google the new Microsoft? Many think that it is, and in particular there has been a chorus of competition complaints (ironically many originating from Microsoft) that assert that Google's conduct and position today is quite parallel to Microsoft's position in the "Microsoft case," the case brought by the Department of Justice in 1998. (1)

we contend in this article, however, that there is a central difference which should remain in constant focus in any antitrust analysis. The cost of a user switching from Google Search to another search engine today is trivial compared to the cost of a user switching from Microsoft windows to another operating system in 1998. Moreover, in the Microsoft case, the government's theory was that Microsoft was taking strategic actions to maintain high switching costs by maintaining an "applications barrier to entry." (2) There is no parallel with Google, and the implication as we shall explain is that Google Search, if it poses any threat today, does not pose the same antitrust threat that Microsoft windows posed in 1998. In this article, we explore the importance of high switching costs in the Microsoft case and in antitrust cases more generally, and we explain the criticality of the absence of significant costs for users switching from Google Search.

The Federal Trade Commission (FTC) recently decided not to bring a monopolization case against Google Search after a 19month investigation. (3) But this is by no means the end of the matter: the European commission (EC) is "examining proposals put forward by Google to resolve complaints" and expects resolution after the Commission's summer break. (4) The FTC decision notwithstanding, competitors continue to complain to antitrust authorities and urge them to investigate Google Search for anticompetitive conduct. (5) On January 30, 2013, the Initiative for a Competitive Online Marketplace (ICOMP), a coalition including Microsoft Corp., submitted a new dossier of allegations to the European Commission. (6) The most widely reported accusations against Google claim that it biases in favor of its own information or services in search results. (7)

Comparisons between antitrust complaints in the Microsoft case with current (so far non-litigated) complaints against Google Search ignore two fundamental differences related to the switching costs facing users of Microsoft Windows and Google Search. First, Microsoft has dominated operating systems for personal computers for nearly 30 years, mainly because switching costs for users and application developers were and are high--prohibitively high for many. …

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

The Role of Switching Costs in Antitrust Analysis: A Comparison of Microsoft and Google
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.