How Google uses its cash to preserve search dominance

Nov 02, 2021 at 09:36 pm by admin

Australian internet users should be reminded they don’t have to use dominant search engine Google, the country’s competition watchdog says.

The “choice screen” option – providing consumers with “a selection of search engines” – is one of the recommendations of the third interim report of the ACCC’s Digital Platform Services Inquiry.

It finds that Google has market share of 94 per cent with Google Search the default search engine on the two most popular browsers in Australia, its own Chrome browser and Apple’s Safari browser, which are pre-installed on most mobile devices.

Google’s dominance in general search engine services in Australia was “extended and entrenched” by the large sums of money it pays to be the default search engine on Safari browser, its ownership of Chrome and by the preinstallation and default arrangements it has with competing browser suppliers and device manufacturers that use its Android operating system.

Chair Rod Sims said the ACCC was concerned that Google’s dominance and its ability to use its financial resources to fund arrangements to be the default search engine on many devices and other means through which consumers access search, such as browsers, was harming competition and consumers.

“Google pays billions of dollars each year for these placements, which illustrates how being the default search engine is extremely valuable to Google’s business model.”

A survey commissioned by the ACCC found that most consumers surveyed tend to stay with their device’s pre-installed browser and preset search engine.

About a quarter of consumers did not know how to change the default web browser or search engine on their mobile device.

“Access to consumers is critical for search engine services to grow and compete against Google, but Google’s vertical integration and costly commercial arrangements have made this very difficult,” Sims said.

“Google’s existing dominance and its commercial arrangements have significantly increased barriers to entry and prevented new or emerging rival search engines from reaching consumers, not only through browsers but also through other access points like search apps, widgets and voice assistants like Siri.”

“This is likely to have stifled innovation and reduced consumer choice. It means that consumers may not be exposed to or aware of other options, such as search engines that protect users’ privacy and/or have an ecological focus, which limits the ability of these businesses to grow.”

While most search engines did not charge users to conduct search queries, a competitive search services market could include many benefits for consumers including innovation in search results or display, a reduction in sponsored advertising results and incentives to attract users through novel offerings such as rewards or better data protection.

“It is common for the quality of service to suffer when companies gain a dominant position,” he said.

The ACCC is asking for powers to develop and implement a mandatory search engine choice screen, having decided that Google’s own choice screen for Android devices in Europe was deficient.

The ACCC also recommends that it be given powers to develop other measures to improve competition and choice in search – perhaps by restricting dominant search engines from tying or bundling search services with other goods or services.

The measures would sit alongside rules and powers proposed in the ACCC’s Ad Tech final report, which will accompany the fifth report of the Digital Platform Services Inquiry, for which consultation is planned in 2022.

• ACCC chair Rod Sims is querying deals made by Facebook to pay for which include the ABC, but not the SBS, the country’s second public broadcaster, or The Conversation, while Google content deal with both.

Pictured: Attempts to create ‘choice screens’ in Europe caused controversy

Sections: Digital business


or Register to post a comment