Secretive Google invites regulation

When Google wants to know who to blame for the proposed regulatory crackdown on its ­market power, it should look in the mirror.

This enormous organisation, which is a dominant force in online advertising, has completely misread the determination of the Australian Competition & Consumer Commission to apply ­normal competition principles to a new medium.

It is a simple case of the ­competition cop, after being confronted by a lack of transparency, going to bat for those without market power — in this case, onlin­e advertisers.

The centrepiece from the chapter of the ACCC’s report obtained by The Australian is the preliminary recom­mendation to create a new regul­ator to monitor, investigate and report on whether the big digital platforms are engaging in anti-competitive and discriminatory conduct.

This looks a lot like the ­“algorithm review board” that had been proposed by News Corp Australia.

But the ACCC seems to have come up with a way of simplifying the task of monitoring these tech giants by giving them a strong ­incentive to prove their bona fides. There is an associated call for a separate regulator to ­monitor the pricing of intermed­iary services for online advert­isers, as well as an ombudsman to deal with complaints.

But the real power looks like going to the proposed regulator covered by preliminary recom­mendation No 4, which would have oversight of the advertising and related business of the digital platforms.

This all seems due to the fact that Google, in particular, has been reluctant to permit truly ­objective monitoring of key data concerning its advertising ­business.

Algorithms are at the financial heart of Google and Facebook — matching advertisements to ­online search terms and inserting relevant ads on Facebook feeds. The ACCC has accepted that these algorithms are sensitive and is not proposing that information extracted from the digital giants will be made public.

That, however, implies that details about algorithms might indeed be subject to oversight by the new regulator, which looks like being an algorithm review board in reality, if not in name.

The new regulator would have the power to extract information and documents. It would investigate complaints, initiate investig­ations, make referrals to other agencies and publish reports.

It is also worth noting that its jurisdiction would be advertising “and related business oversight” — which seems broad enough to cover Google Search, Google News and their links to the advertising side of the business.