The Australian Competition and Consumer Commission proposes limiting the internet giant’s ability to access user web history to cross-sell products.
An Australian regulator is considering letting internet users choose what personal data companies like Google share with advertisers, as part of the country's attempts to shatter the dominance of tech titans.
The Australian Competition and Consumer Commission (ACCC) also proposed limiting the internet giants' ability to access users' online histories to cross-sell products.
The proposals were part of the ACCC's interim report into digital advertising in Australia, a $2.6 billion (A$3.4 billion) market the regulator said is marked by a lack of competition, transparency and choice.
The ACCC estimates Google's share of Australian digital advertising revenue at between 50 percent and 100 percent, depending on the service.
READ MORE: Google threatens to block Australians over media law
"Google is the only one that can determine the effectiveness of ads, so really often they're marking their own homework when it comes to the effectiveness of the ads they supply," ACCC chair Rod Sims told Reuters in a telephone interview.
"There's a lot wrong with the market ... and it's effectively dominated by one player," he added.
The proposals add a new element to the antitrust regulator's campaign to check the power of online behemoths Google and Facebook Inc in Australia.
Proposals by the ACCC that Google pay local media for content that drives traffic to their websites have been adopted in draft legislation by the government. Google has criticised the planned News Media Bargaining Code, threatening to pull its search engine from Australia if they go ahead.
Our interim digital advertising services report has concluded that a lack of competition and transparency in the digital advertising technology supply chain is impacting publishers, advertisers and consumers. and needs to be addressed. https://t.co/r60Mcuj5YH pic.twitter.com/PCTzXCNXN4— ACCC (@acccgovau) January 28, 2021
In Thursday's 222-page digital advertising report, the regulator also suggested a system under which users' personal data would be shared more widely with advertisers, on an anonymised basis, to foster more competition.
Allowing internet users to choose to give other parties access to their clicking data may also promote competition among online advertising suppliers, the ACCC said.
Preventing tech companies from using data collected in one scenario to sell advertising in an unrelated field would also reduce the ability of a single player to dominate the digital ad market, the report added.
The regulator is accepting submissions for the next month ahead of a final report due in August. The government will then decide whether to make its recommendations law.
A Google spokesman said the company's advertising service "helps businesses connect with customers and publishers reach new audiences, creating new growth and revenue opportunities for them".
A Facebook representative said the company was reviewing the report, without commenting further.
Australian Treasurer Josh Frydenberg noted the ACCC's "concerns over competitiveness and the continued dominance of tech giants" but did not say whether he supported the proposals.
READ MORE: Google 'experiment' blocks Australian news from local searches
Sims said he was not surprised by Google's threat to pull its search platform if the media laws went ahead.
"If you want to come up with good public policy on these issues you're bound to be getting companies to do things they don't want to do," he said.
Hannah Marshall, a partner at Marque Lawyers who specialises in competition law and media, told Reuters she expected Google and Facebook to start withdrawing services if the law went ahead.
"While this requirement to pay to link to news content remains in the code, I don't think that there's going to be a resolution that works," she said.
"If enacted in its current form, Google and Facebook are likely to make good on their threats and that will kind of start a chain reaction of bad consequences for a lot of people in Australia, not only the news publishers."
Ignoring Google’s threats
The Council of Small Business Organisations Australia (Cosboa) urged Australia to ignore threats from Google to shut down its search service and press ahead with a rule to force the technology group to pay for news.
According to the Guardian, Cosboa chief executive Peter Strong said Google turning off search in Australia would hurt small businesses trying to promote themselves as well as consumers trying to find products, but tech giant should still face "strict regulation".
Last week, Google Australia Managing Director Mel Silva told Senate in Canberra that if the current draft media laws went ahead unchanged it would be "the worst-case scenario" and force the firm to block Australians.
"If this version of the code were to become law, it would give us no real choice but to stop making Google Search available in Australia," Silva said.
A bargaining code forcing digital platforms such as Google and Facebook to negotiate with media companies over payment for news content would be introduced to parliament. If not agreed, they would be sent to an arbitrator to pick one of the offers made by the sides.
The rule, which was developed by Australian Competition and Consumer Commission Chairman Rod Sims, would cause "unmanageable financial and operational risk" and forcing Google to pay for news content would set a dangerous precedent, according to Silva.
On other hand, Strong said the threat highlighted the problem of dealing with one dominant market player, adding “They’re not evil, they’re just too big” and that Cosboa “will find ways around this, but some businesses will suffer from it”.
Strong highlighted that small business had problems with the way Google’s search algorithms worked, however despite Google mounting “quite sound” arguments against the code, Cosboa supported it.
READ MORE: Australia to force Google and Facebook pay for news in unprecedented move