Gatekeepers may seek to maximize revenues by replacing any unbiased, purely relevance-based intermediation of business users with a biased, payment-based intermediation. To this end, search engines, app stores or online marketplaces may exploit an entrenched intermediation power by making the outcome of their matching increasingly dependent on the amount of money that a business user is paying the platform for the intermediation, rather than on objective criteria to determine the relevance of offerings. Using the example of the systematic replacement of “organic” search results with paid results in Google Search, the article outlines under which circumstances a shift to a biased intermediation constitutes a market failure. The article concludes that an excessive substitution of unbiased intermediation by a gatekeeper may amount to an unjustified private “toll” to access markets that reduces competition and innovation. The article then outlines how regulation can ensure a sufficient level of purely relevance-based intermediation of gatekeepers.
By Thomas Höppner1
It is the central function of commercial online intermediaries to best match the offers of their business users with the demand of their end users, as expressed by the latter’s search query to the platform.2
Where faced with competition, intermediaries strive to enhance the quality and hence the attractiveness of their service by indexing, ranking and displaying (“matching”)!-->…