Tuesday, 05 March 2019 05:18

Google claims it has no market power in online search or advertising Featured

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Google claims it has no market power in online search or advertising Image by Pexels on Pixabay

Google has rejected the preliminary findings of the Australian Competition and Consumer Commission's digital platforms inquiry, saying there is no need for any regulatory body to oversee its functioning and claiming that it does not have any market power in search and advertising online.

In a submission in response to the ACCC's preliminary findings, the search giant said on Monday that the report was based on the "mistaken premise" that it had market power in search, search advertising and referrals to different media.

Rather, it competed for users by providing "high-quality search results", the company claimed. "Google is just one among many sources of traffic to news sites. Direct navigation by consumers to news sites is the largest source of traffic," it added.

As far as search advertising went, the submission said the preliminary report was wrong to conclude that Google is not restricted by other forms of advertising. "Google faces competition from many sources including thousands of search, travel, e-commerce, and publisher sites along with other forms of online and offline advertising," it said.

In its preliminary report, the competition watchdog had concluded that Google had substantial market power in online search, search advertising and news referral while Facebook had similar clout in markets for social media, display advertising and online news referral.

Among the preliminary recommendations were those aiming to address Google and Facebook’s market power and promote increased consumer choice, including a proposal that would prevent Google’s browser Chrome being installed as the default on mobile devices, computers and tablets and Google’s search engine being the default search engine on browsers.

The submission disputed the preliminary report's statement that “the clickwrap agreements used by digital platforms also contain take-it-or-leave-it terms and involve the bundling of a wide range of consents".

In response, it said: "There are many ways for Google users to use our products and services while leaving a minimal data footprint, contrary to the concerns about 'take-it-or-leave-it' terms. For example, many of our most popular services, including Search, YouTube, Maps and Chrome, do not require a user to create an account."

Regarding competition in search, Google said in addition to competing with general search providers like Bing and DuckDuckGo, it competed with specialised search services for shopping, local, and travel among others.

"The most prominent example, of course, is Amazon, which is the most popular search service for product searches in the US. In travel search, Webjet, Expedia, Trivago, TripAdvisor, Skyscanner and Wotif are very popular," the submission said.

"Similarly, in local search, Yelp, TripAdvisor, Facebook, Instagram, OpenTable, and many country-specific platforms such as True Local or The Fork in Australia, are used to find restaurants and other retail establishments."

The company claimed that it did not use large-scale user data as a key input for its search function, adding that its returning of relevant results to queries was derived primarily from its quality engineering.

Additionally, the submission said that the number of users did not drive the number of users in search. "The preliminary report also suggests there is a feedback loop on the theory that the number of advertisers that Google Search attracts make it more valuable to users. That is not the case.

"While users benefit indirectly from Google’s ad revenue, because we allow them to use Google Search for free, users typically do not consider a search platform more valuable because it offers more or better ads, or a larger pool of advertising. Rather, users turn to Google Search primarily based on the quality of the organic search results it returns in response to queries."

When it issued the preliminary report on 18 December, the ACCC had said it would issue a final report by June this year. Last month, ACCC chair Rod Sims said he was seeking more data from the advertising industry about the conclusions reached in the preliminary report.

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Sam Varghese

Sam Varghese has been writing for iTWire since 2006, a year after the site came into existence. For nearly a decade thereafter, he wrote mostly about free and open source software, based on his own use of this genre of software. Since May 2016, he has been writing across many areas of technology. He has been a journalist for nearly 40 years in India (Indian Express and Deccan Herald), the UAE (Khaleej Times) and Australia (Daily Commercial News (now defunct) and The Age). His personal blog is titled Irregular Expression.

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