Abstract
Abstract We discuss competition policy issues of vertical integration in internetbased two-sided markets against the background of the Google antitrust allegations. Network effects and economics of scale often lead to dominating companies, which are integrated over several markets. This implies efficiency gains but creates barriers to entry. Where entrants can appropriate dynamic effects accumulated by incumbents, barriers to entry are lowered but this reduces incumbents’ incentives to invest. Reducing multi homing and increasing switching costs is anti-competitive behaviour. Manipulating search results may leverage market power, but there is no theory on the ‚information power‘ of search engines. The concept of ‚search neutrality‘ is not convincing.
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