Average Annual Cost Per Click (CPC) for US Queries, 2016-2021
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UPXD102 at 39.
These different pricing trends can be explained by competition (or the lack thereof). Google’s ability to profitably raise text ads prices is surely due in part to the lack of any meaningful competition in that submarket—Microsoft is its only true competitor. See infra Section III.B.2. The competitive conditions for PLAs are very different. Amazon, as discussed, is a major competitor. Dr. Whinston put Amazon’s search ads market share at 19%, a likely underestimate given the exclusion of product-page ads. Fig. 78, Whinston Expert Report, ECF No. 418-1, at 185; Tr. at 8459:16-20 (Israel). Also, many other retailers compete in the PLA space (e.g., Home Depot, Walmart, Target), and though their share is small now, it is likely to grow. See Tr. at 8438:12-20, 8550:2-10 (Israel). These competitive market conditions likely explain why Google’s PLA prices remained largely unchanged from 2016 to 2021.
Google’s lack of pricing power as to PLAs cautions against inferring that Google’s pricing power in search text advertising extends to the broader search ads market.
- b. Indirect Evidence
Nor is the court convinced that indirect evidence establishes monopoly power in the market for search ads.
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