What is the ACCC’s end game with Google?

Mel Silva, managing director of Google Australia.

The Australian Competition and Consumer Commission and antitrust regulators around the world are gunning for Google. But what is the end game, short of forcing it to divest assets, which arguably is too late?

The question is posed in the wake of the Australian watchdog’s latest action against the giant, alleging misleading behaviour its tracking of consumer behaviour on websites.

The ACCC’s Rod Sims says the aim of the litigation is to set boundaries. But what is a court going to tell Google - don’t follow people on the internet, or make sure you put out better disclosure statements so people understand you are following them?

The question then is whether either of the above will make any difference to the tech giant.

The answer is the more people understand the value Google gets from using their data, the more concerned they will become.

It’s a work in progress.

Which brings up the proposed media code of conduct, due out this week, detailing just how news organisations can be compensated for the use of their material by tech giants like Google.

Google makes several points on this issue, starting with the claim it only makes $10 million a year from the use of news content, and that each year it transfers $218 million in value back to the news organisations through searches directed to their websites. Finally, it says, only 1.25 per cent of all searches are directly related to news.

Google says the impact news content has on its business is minimal, which is a claim which could only be tested if you removed all news content from its searches and other data-hoovering vehicles like DoubleClick.

There are statistics and statistics, depending on what case you want to present.

The ACCC code will address just how news organisations will be compensated.

News Corp wants final offer arbitration which says if Google says the compensation is $10m News Corp says $100m then the ACCC will choose one or the other and not a number in between.

The idea of this suggestion is that Google knows better than most how to tie up debates in courts for years, so better to have a 12-month fee set from the beginning, which can’t be complicated.

Then next time around, both sides will be more realistic in their negotiating.

Back in 2007, when Google acquired DoubleClick to give it access to consumer website searches, few outside Google realised the enormous commercial boost it would provide.

Everyone does today, because DoublesClick has moved from being a new technology company into being part of an advertising behemoth controlling digital advertising.

That‘s the challenge with competition law.

The ACCC comes to the table with the benefit of valuing its consumer powers and its competition powers as part of the same armoury.

It is one of the few regulators in the world to possess both, and they are being employed in the battle with Mel Silva at Google Australia.