[stakhanov]

This thing doesn't address the problem it was actually meant to address which is to stop an anticompetitive practice. The spirit of the law in relation to antitrust is that you can't abuse a monopoly in one market to gain a monopoly in another. That's why it wasn't acceptable that Google's Android would set Google to be the default search engine and offer no other options.

Now Google says to those other search engines: Hey, you CAN be the default. But you're going to have to give us ALL your profits.

How is that any less anti-competitive than what they were doing before?

Footnote: Why am I saying ALL of their profits? Well it's four slots. Google is going to be one of them. Microsoft and Yahoo are going to bid whatever it takes to be on the list. -- Now there's ONE slot left for everyone who isn't part of the existing search oligopoly like Ecosia, Qwant, DuckDuckGo and so forth.

Now imagine if this was open outcry: Ecosia bids X dollars. Qwant outbids them by offering X+1 dollars for that fourth slot. Well: If Ecosia knows they would still be profitable even if they had to pay X+2 dollars, that's what they're going to bid, isn't it? They hit a limit only at the point where they know that the deal would turn unprofitable. The guy that gets the slot would, in open outcry, end up paying the next guy's profit plus one dollar. But that's not the model. They're doing sealed bids and you'll have to actually pay what you bid, so... -- That's why I'm saying ALL their profit.

[jsnell]

So, let's imagine that Android was an independent entity from Google. Obviously selling the default search engine placement would be one of their main forms of monetization, just like it's for Firefox and iOS.

How would that monetization be done? We know from Firefox and iOS what happens if you sell the outright default with no selection: Google will buy it basically everywhere. That won't increase competition in search at all. To achieve that, you'd need to sell multiple slots. Which is exactly what this proposal ends up doing.

If the behavior of search engine selection ends up exactly the same in Google-owned Android and in the best-case scenario for an independent Android, where's the problem?

> They're doing sealed bids and you'll have to actually pay what you bid, so... -- That's why I'm saying ALL their profit.

That seems like a fair criticism though. In addition to the issues with first-price blind bids, a year seems like a really long interval. If it was e.g. monthly, there would at least be some scope for iterative price discovery.

[stakhanov]

Well, let's just observe that all of the players who it is SUPPOSED to be helping, like DuckDuckGo, Qwant, Ecosia, etc have all gone on the record pretty much the second this was announced, saying that they DON'T LIKE IT. So there has to be something there which is a marked deviation from what the industry structure currently is that is to their disadvantage.

[piaste]

> If the behavior of search engine selection ends up exactly the same in Google-owned Android and in the best-case scenario for an independent Android, where's the problem?

Do you really not see a difference between a company making the highest bid at an auction, and that same company owning the auction house and getting an infinite bid for free?

Say Boeing and a bunch of smaller companies are bidding on various defense contracts. But then Boeing gets fully nationalized and they start bidding zero dollars for everything, because it all goes back in the same federal budget. When the competitors complain, Boeing responds "well, we all know we would have won anyway even if we had stayed a private company, so the end result to the Pentagon is the same - they get Boeing aircraft. Where's the problem?". Is that a fair market?

[jsnell]

I can't map your analogy to this case at all, it just ends up as total nonsense.

Android seems to be the federal government, so Boeing is Google, and bidding for a defense contract is bidding for search engine provider placement. But the flow of the money is the wrong way around (the government is the entity paying, while Android is the entity receiving payments). And the other mismatch is that the search engine auction has four slots each of exactly the same value, while contracts for military airplanes seem to be single-sourced. If Boeing wins the JSF bid with the X-32, there won't be a F-35 contract for Lockheed.

What you're proposing is that not one, not two, not three, but four other companies figure out a way of monetizing search more effectively than Google. (Judging from iOS, the count is at 0 right now). If that happens, there's no point in worrying about Google having a dominant position anyway, since their core business must be totally screwed.

(Would you be happy with an auction where Google needs to put in a synthetic bid based on the actual observed value of a mobile search user?).