Market or Markets? Investigating Google Search's Market Shares Under Horizontal and Vertical Segmentation

TL;DR

This study interrogates whether Google Search holds monopoly power under horizontal versus vertical market definitions by analyzing observational trace data from a US panel in 2020. It develops a dual-track methodology: quantifying horizontal market share among Google, Bing, and other engines, and mapping and comparing vertical search usage across 90 FortiGuard segments, including a session-based perspective to assess gatekeeping. The key findings show Google dominates horizontal search with about 71.8% of queries and drives initial activity in 24 of 30 vertical segments, signaling substantial gatekeeping power and potential leverage into vertical markets. The results illuminate how market power in online search may depend on segmentation and user behavior, offering granular evidence to regulators on both structural remedies and behavioral safeguards to curb intermmediary dominance.

Abstract

Is Google Search a monopoly with gatekeeping power? Regulators from the US, UK, and Europe have argued that it is based on the assumption that Google Search dominates the market for horizontal (a.k.a. "general") web search. Google disputes this, claiming that competition extends to all vertical (a.k.a. "specialized") search engines, and that under this market definition it does not have monopoly power. In this study we present the first analysis of Google Search's market share under both horizontal and vertical segmentation of online search. We leverage observational trace data collected from a panel of US residents that includes their web browsing history and copies of the Google Search Engine Result Pages they were shown. We observe that Google Search receives 71.8% of participants' queries when compared to other horizontal search engines, and that participants' search sessions begin at Google greater than 50% of the time in 24 out of 30 vertical market segments (which comprise almost all of our participants' searches). Our results inform the consequential and ongoing debates about the market power of Google Search and the conceptualization of online markets in general.

Figures (5)

• Figure 1: Shares of top ten vertical segments according to three different classification approaches. In each approach, SERPs with clicks are assigned the vertical segment of the clicked URL. SERPs without clicks are assigned a vertical segment based on the most frequently appearing segment (Approach I), segment distribution (II), and weighted segment distribution (III), respectively.
• Figure 2: Share of vertical sessions types under three rolling window sizes.
• Figure 3: On 86.3% of the days in our five month observation window, Google Search was used more than all vertical search engines combined. Figure \ref{['fig:users_vs_time']} presents the number of participants that conducted at least one search in each category (e.g., Google Search, Bing, another horizontal search engine, or any vertical search engine) per day, Figure \ref{['fig:search_volume_vs_time']} presents the total number searches per day per category, and Figure \ref{['fig:sessions_per_day_vs_time']} presents the total number of sessions per day per category. Google's vertical search engines (e.g., GMail, YouTube, etc.) are counted among all other vertical search engines in these figures. Participants' usage trends were steady over time after accounting for natural attrition among participants. Google Search was consistently used more than competing horizontal search engines, although Bing users conducted more searches per person per day than Google users.
• Figure 4: Google receives $>$ 50% of searches in 21 out of 30 vertical segments. We examine the fraction of searches in each of the top 30 vertical segments that occurred on Google Search, another Google product, Bing, or an independent vertical search engine, and perform 1000 bootstrap replications to compute 95% confidence intervals. Five of the verticals where Google Search receives $>$ 50% of searches are within the confidence interval. The top inset shows the overall distribution of searches.
• Figure 5: $>$ 50% of participants' search sessions begin on a Google product (or solely involve a Google product) in 24 out of 30 vertical segments. We examine the fraction of search sessions in the top 30 vertical segments including: only searches on Google products, only on Bing, only on vertical search engines, or searches on two of the three. In the latter case, we divide the search sessions based on where the initial search in each session occurred. We compute 95% confidence intervals for the sum of 'Google Only' and 'Google to Vertical' categories using 1000 bootstrap replications. The top inset shows participants' session distribution.