Google, Facebook in the firing line
GOOGLE has rejected calls by the Australian Competition and Consumer Commission for tougher scrutiny of its operations, denying that it enjoys market power in online searches and advertising, documents published on Monday night show.
The global giant was responding to recommendations made late last year by the watchdog, such as increased scrutiny and a new regulatory body to monitor the dominance of tech giants in online advertising and news markets.
The preliminary findings of Australian Competition and Consumer Commission's Digital Platforms Inquiry suggested a range of ideas to protect users and limit the unchecked dominance of technology giants in Australia.
Google's response was swift.
"The preliminary report bases many of its recommendations on the mistaken premise that Google has market power in search, search advertising, and news media referrals," Google wrote in a February 18 statement published by the ACCC.
"Google faces fierce competition from other providers, including vertical search sites like Amazon, Expedia, Domain and Carsales.com.au, many of which users access directly through mobile apps."
The ACCC had said the enormous market power of firms such as Google, which has a 94 per cent share of web searches in Australia, and their opaque methods for ranking advertisements, gave them the ability and incentive to favour their businesses over advertisers.
In preliminary recommendations that are subject to change, the ACCC also said the new regulator should have powers to investigate how the companies rank advertisements and news articles.
Over 80 submissions to the ACCC Digital Platforms inquiry were published, including from individuals to corporates and charities.
The overwhelming majority of respondents supported the ACCC's 11 preliminary recommendations, such as media regulations for digital platforms, timely ways to remove stolen content, and new rules for collecting personal information and dealing with "serious invasions of privacy".
The Australian Communications and Media Authority said the inquiry made "a clear case for bringing digital platforms into the regulatory framework" applying to other media organisations, as while they had begun as "innovative start-ups" the companies had "become global behemoths".
"These platforms now have significant market power in Australia as a consequence of their dominance in digital advertising and media content, including news," it said.
"The increasing influence and market power of digital platforms mean that regulatory reform is now urgent."
Google rejected such a measure as "unnecessary".
It said the regulator had provided no evidence that regulatory review of Google's algorithms and potential recommendations for more disclosure about its news ranking would lead to higher quality search results.
"We support transparency for our customers and partners in a fragmented space, but we disagree with the appropriateness of price monitoring as a solution," Google said in the statement.
Australia, which has passed laws forcing tech companies to help police access user data amid growing concerns about the distribution of so-called "fake news", ordered the inquiry into their influence as part of wider media reforms in 2017.
The ACCC will subject final recommendations to the Federal Government by June 3.