The Australian Competition and Consumer Commission (ACCC) has said that the introduction of a choice screen may help address market issues created by Google’s dominance in the search engine industry.
“We are 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, is harming competition and consumers,” ACCC chair Rod Sims said.
Noting that search engines play a critical role in the digital economy, the ACCC’s latest Digital Platform Services inquiry interim report found that Google continues to dominate the business in Australia with 94 per cent market share.
In an attempt to remedy the problem, the ACCC is now calling for the introduction of a mandatory search engine choice screen akin to that introduced by the European Union in 2019.
Mr Sims argued that an Australian take on this measure could give consumers the opportunity to make an informed decision about their choice in search engines.
“Choice screens can also help reduce barriers to expansion for competitors to Google, who may offer consumers more options for alternative search engines around issues like privacy and how personal data is collected and used,” he said.
Both local and overseas research have consistently found that most users tend to stay with their device’s defaults when it comes to search engines, with the ACCC finding that one in four didn’t even know how to change their preferred search engine.
“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,” Mr Sims explained.
The regulator noted that Google has entrenched its dominance in the sector through its ownership of the Chrome web browser, the Android smartphone ecosystem and deals with Apple that makes it the default search engine for consumers on iOS devices.
“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,” Mr Sims said.
According to the ACCC, Google’s dominance in searches is likely to have stifled innovation in the sector and harmed consumers through reduced choice.
“It is common for the quality of service to suffer when companies gain a dominant position,” Mr Sims said.
The tech giant’s presence in searches is so extensive that consumers may not be exposed to or aware of other options.
Over time, Mr Sims said that this dynamic has meant that businesses looking to compete with Google by offering consumers more privacy or other features are unable to effectively do so.
“While most search engines do 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,” he said.
Although a search engine choice screen may prove helpful for informing consumers, the evidence that it will eat away at Google’s overwhelming dominance in the search business is less convincing than the arguments for it.
By most metrics, Google’s market share for search engines has remained largely unchanged in the two years since the European Union implemented a search screen.
The ACCC said that it was aware of deficiencies in these arrangements, and that it would continue to monitor significant developments and proposals overseas.
In addition to introducing a search engine choice screen, the regulator said it would also push for additional powers that would allow it to restrict Google from tying or bundling search services with other goods or services.
“The ACCC intends to commence consultation regarding these potential proposals for broader regulatory reform in 2022,” Mr Sims said.
