ACCC shakes Google’s grip on mobiles

Google will be forced to give Android mobile users in Australia the freedom to use a search engine and browser of their choice.

ACCC chairman Rod Simms. Picture: John Feder.

Google will be forced to give Android mobile users in Australia the freedom to use a search engine and browser of their choice, with the Australian Competition & Consumer Commission forcing the technology giant to loosen its grip on the operating system.

Rather than leave users to rely solely on Google’s search engine and the Chrome browser, which are pre-installed in Android devices, the ACCC wants Google to promote other browsers and search engines and make them available for download.

It’s something Google has already done in Europe, after the European Commission slugged the tech giant with a record $US5 billion ($7.2 billion) fine last year.

The European Commission’s case highlighted the extent to which Google denied rival search engines the possibility to compete on Android devices, with the company engineering the pre-installation of its search engine and browser on practically all Android devices and using exclusivity payments to reduce the incentive for device makers to pre-install competing search engines.

While Google filed an appeal against the European Commission’s decision, it subsequently agreed to give Android users — which extends to all Samsung, Huawei, Google and Oppo smartphones — wider browser and search engine choice.

The ACCC wants Google to follow suit in Australia, either voluntarily or being forced by the federal government to do so.

“Google should provide Australian users of Android devices with the same options being rolled out to existing Android users in Europe, that is, the ability to choose their default search engine and default internet browser from a number of options,” the ACCC said yesterday in its landmark Digital Platforms Inquiry.

“If Google does not introduce similar options for Australian Android users by six months from the date of the Report, the ACCC will submit to the government that it should consider compelling Google to offer this choice,” it said in the final report released yesterday.

According to the ACCC, giving consumers more choice is crucial to breaking the ‘‘default bias’’ which benefits Google.

“The ACCC identified customer inertia as a barrier to expansion and considered that the customer inertia is reinforced by a default bias that exists with Google Search being the default search engine on a number of internet browsers, and Google Chrome being the default internet browser on a number of operating systems.”

Google benefits from its position as the default search engine on both the Chrome browser (owned by Google), and the Safari browser (owned by Apple), which together account for more than 80 per cent of the Australian market for browsers.

Google pays Apple to be the default search engine on its Safari browser, shelling out $US9 billion for the spot in 2018 and close to $US12bn in 2019.

“The preliminary recommendation has the potential to improve competition in the supply of search services by lowering barriers to entry and expansion for rivals to Google Search that are not vertically integrated with browser,” the ACCC said.

The recommendation is one of 23 measures prescribed by the regulator after its 18-month inquiry into the market power of Google and Facebook in Australia. The Morrison government will consult about the recommendations over the next few months and respond to the report by the end of the year.

While the regulator has stopped short of pushing for the companies to be broken up, it is asking for an overhaul of existing merger law to force them to inform the ACCC about the impact of any future merger on competition.

It’s also looking to create a new digital platforms arm that would be focused on developing expertise in digital markets and the use of algorithms by Google and Facebook.

The division will be in charge of monitoring and investigating instances of potentially anti-competitive conduct and conduct causing consumer harm by digital platforms. It will have the power to hold public inquiries covering five years and to force technology companies to provide information relevant to any investigation.

The technology sector will be keeping a close eye on how wide a remit the proposed unit will have and the implications of its powers on the digital businesses in general.

A lobby group, Digital Industry Group Inc (DIGI), has warned that the measures proposed to rein in the market power of Google and Facebook could have a chilling effect on the wider technology industry.

DIGI managing director Sunita Bose said that the federal government must consider the impact of the proposed rules.

“We urge the Australian government to assess the ACCC’s recommendations against an innovation test, closely examining how they will impact Australia’s digital industry at large and Australia’s global standing as a place to invest in technology,” she said.

“We’re closely reviewing these recommendations to ensure they don’t bring unintended consequences to all digital businesses and the choice of digital products available to Australian consumers.”

DIGI’s founding members include Google, Facebook, Verizon, Twitter and ASX-listed online design marketplace Redbubble.

With Google and Facebook siphoning vast volumes of user data, the ACCC has also put forward steps to give users greater control over their information.

According to the ACCC, the current Privacy Act should be strengthened with tighter rules obtaining user consent before collecting data.

“The Privacy Act needs reform in order to ensure consumers are adequately informed.”

Australian Information and Privacy Commissioner Angelene Falk said that helping people make informed choices was fundamental.