Tech titan Google under attack on existential questions

Much like its web search dominance, Google accounts for about 90 per cent of the digital display advertising market. Picture: AFP

The competition watchdog’s interim report into the digital advertising market represents yet another challenge to Google’s monopoly power, following Australia’s landmark bargaining code legislation and mounting antitrust action against it in the US and elsewhere.

Australia, through competition tsar Rod Sims, is showing again it’s not afraid to stand up to the tech giant. Combined, worldwide actions amount to a near existential threat to a gigantic company that has changed much since its humble days as a search engine in the 1990s.

Much like its web search dominance, Google accounts for about 90 per cent of the digital display advertising market. Its technology powers the ads that follow you around the internet; when you search for a new mattress, it’s how ads for new mattresses seem to chase you for weeks after, no matter what website you’re on. Google has a hand in almost every step of that process as a result of it buying up ad tech companies over the years.

Google not only powers the digital display technology, it also controls a lot of advertising space, including on its own website, and places like YouTube. The competition watchdog says Google is “likely to have the ability and incentive to favour its own related business interests” — a practice known as self-preferencing — and has potentially misused a market power provision in the Competition and Consumer Act.

The US Justice Department is wise to Google’s behaviour, too. Along with 11 US states, it sued the tech titan in October alleging it had a dominant position in search and advertising, and “absent a court order, Google will continue executing its anti-competitive strategy, crippling the competitive process, reducing consumer choice and stifling innovation”.

The US government in the late 1990s accused Microsoft of anticompetitive behaviour by bundling its Internet Explorer web browser with its Windows operating system. The government won that case, and the court ordered a break-up of Microsoft, a penalty that was lessened on appeal. The US Justice Department has said “nothing is off the table” when asked whether it would pursue a break-up of Google.

Much as it has done with its mandatory bargaining code, the ACCC is considering rules to help spur competition in the local market, and bring Google to heel. This could include new data separation mechanisms, laws against self-preferencing and rules to force greater transparency.

Break-up or not, Google faces existential questions on several fronts, and the next year is shaping as crucial for just how big Big Tech should be — and what we want to do about it.