Advanced Law Elective Research: Google's Market Power in Australia

This report examines Google's significant influence on the Australian advertising landscape, focusing on its market power, particularly in online search and advertising. It analyzes Google's business model, data collection practices, and its impact on news media businesses and advertisers. The report references the Competition and Consumer Act 2010 and the ACCC's Digital Platforms Inquiry, highlighting concerns about Google's dominance, potential anti-competitive behavior, and lack of transparency. It discusses the implications of Google's control over algorithms, data usage, and the challenges faced by advertisers. The report concludes by discussing the key objectives of the report in identifying the impacts of Google in terms of its power over the market and distribution channels, and how Google has transformed the concept of communication and accessibility of news and advertising procedure.

0
ADVANCED LAW ELECTIVE - RESEARCH TASK

ADVANCED LAW ELECTIVE - RESEARCH TASK1
Table of Contents
Introduction......................................................................................................................................2
Google and online research advertising...........................................................................................3
Discussion........................................................................................................................................7
Conclusion.....................................................................................................................................12
Reference list.................................................................................................................................13

ADVANCED LAW ELECTIVE - RESEARCH TASK2
Introduction
The modern world is running on the scientific and technological advancements that have
contributed to the development of society as a whole. The digital, as well as the technological
platform, is the entire thing that people around the whole world relies on, to carry on their
regular duties and chores. People connect through these platforms; they make business deals
through it, socializing is another aspect of the digital platform as well as the trait of advertising
or marketing. Most of the organizations in the world today have heavily relied on the
technological platforms to market their products or services and to earn more and more profit
that lead them towards success and expansion too. The digitization of the processes had impacted
the traditional methods like the print media (newspapers, magazines, and pamphlets) and
commercial media (television, radio).
The scenario is Australia is not much different from what it is around the world. Digital
platforms such as Google and Facebook have entered the Australian market as well as the
Australian society long back and have climbed to the top to be the two largest Australian digital
platforms. More and more people join these platforms regularly, and the consumers of the
country form a pretty big part of it. Over the last decade, the number of consumers using these
platforms has increased incredibly to 17 million people using Facebook and 17 million more
viewing YouTube, 19 million people surfing the internet through Google and about 11 million
people accessing Instagram. Business organizations use these platforms frequently to advertise
themselves and Google, as well as Facebook, helps these people out by providing them with
advertising opportunities that are both personalized and highly targeted. The fact that the price to

ADVANCED LAW ELECTIVE - RESEARCH TASK3
continue a Google search is zero adds on to its attractive qualities. Focusing on the competitive
aspects of these platforms, they are managed by the Competition and Consumer Act 2010 that
aspires to provide the businesses of the country a fair as well as the competitive environment for
operating. It checks onto the conducts of anti-competitive aspects such as marketing and
advertising and the report by the Australian Competition and Consumer Commission (ACCC)
gives a detailed picture of how Google and Facebook use the platforms and if they are breaching
the codes of the market under Section 36 of the Act along with the inquiry of whether they are
misusing their power.
Google and online research advertising
The model of business that is used by Google to provide the advertisers with rich sets of data
regarding the consumer makes it a very popular platform. Google is also able to earn huge
revenues from online advertisement and digital marketing. These advertisements are used in the
improvement of the functionality as well as the services that the search engine provides to its
users so that they can have a better kind of experience and to attract more and more consumers
towards Google1. They have improved their techniques to gather data too and lead the share
market by owning 92% of the shares of the global market or search engines. The company can
acquire almost 80% of the total revenues that can be generated through advertisement in
Australian from the selling of the ads appearing within the results of Google Search alone. The
revenue that the company generates from Australian from facilitating the services of the
advertising intermediary is 10%.
1 Schulz, Heather M., Bree L. Dority and Steven A. Schulz, "Individual Differences In Online Consumer
Behaviors In Relation To Brand Prominence" (2015) 15(1) Journal of Interactive Advertising

ADVANCED LAW ELECTIVE - RESEARCH TASK4
The process by which Google is able to transform the communicative ways of the
consumers so that they can access news as well as advertisements online is significant in
management of the online digital marketing2. However, the government and the regulators of the
country have considered the potential and the probable issue that are created due to the
concentration of the power of the market as well as the impacts of the digital platforms in a
broader level. The Australian Competition and Consumer Commission or the ACCC presents a
preliminary report about the digital platforms such as Google and Facebook, which presents the
recommendation of 11 types of which 8 can be stated as future analysis while the inquiry is
carried forward. The ACCC was able to state that the company Google has a strong and
substantial power over the market in Australia in the aspects of online search, news referral as
well as searching advertisement. The report properly presents the concerns of the committee that
these power that the digital companies can impact the business world of the country as well as
the capacity to monetize all the contents of the media businesses. The report is also able to
present argument over the fact that the concerns that have surfaced regarding what extent the
data is regarding the customers are collected and then are used to an advertisement that has been
targeted.
It can be stated that the high shares that Google has in the market can be presented as the
proof that the country presents minimum to almost no competitive constraint on the service
quality of the consumers3. The idea of dynamic competition suggests that the digital platforms
2 Scardamaglia, Amanda and Angela Daly, "Google, Online Search And Consumer Confusion In Australia"
(2016) 24(3) International Journal of Law and Information Technology
3 Reyna, Agustin, and David Martin, "Online Gatekeeping And The Google Shopping Antitrust Decision:
The Beginning Of The End Of The Beginning?" [2017] SSRN Electronic Journal

ADVANCED LAW ELECTIVE - RESEARCH TASK5
always face competitive pressure. It is due to the fact that there is a possibility of producing or
innovating a new technology, which will be introduced within the country and it will help the
company to expand. This concept surrounds digital platforms such as Google and any potential
technological advancement made at a lower price will help the firms to enter into the market
place, which will lead to the displacement of large incumbents.
All these aspects of any companies that provide digital platform in Australia are guided
and controlled by the Competition and Consumer Act 2010 that was made by the Australian
Parliament4. There are restrictive trade practices, and those are maintained by this Act as well.
These practices or the antitrust requirements that form the CCA aims at the deterring practices or
job roles by the firms that are generally anti-competitive as they are a restriction towards free
competition. This part is looked after by the Australian Competition and Consumer
Commissioner the ACCC. Section 46 or the misuse of the market power is part of this Act, and it
prohibits the use of the power over the market to lessen the amount of competition in the market
places of the nation or internationally. It is applicable for both the goods and services that the
companies provide. In this case, it is the digital platform that is provided by Google and the
Australian Competition and Consumer Commission checks into the operational units of this
platform to ensure that the company is not excising monopoly over the market or they are not
engaging in advertising or marketing techniques that are not socially positive.
According to the Australian Competition and Consumer Commission Google has been identified
to have substantial power in the market. The preliminary report that they published shows the
power of Google over specific markets; however, there is a chance for the power to erode within
4 Reyna, A. and D. Martin, "Symposium On Google Search (Shopping) Decision ∙ Online Gatekeeping And
The Google Shopping Antitrust Decision:" (2017) 1(3) European Competition and Regulatory Law Review

ADVANCED LAW ELECTIVE - RESEARCH TASK6
a medium or short term. Google has been forming effective development of the power and
control for enabling the specific formation of the works and 94% of the total searches were done
from the Google. The flow of this is directly from the strong power of the market in the
consumer-facing area for online searches. Google is also quite a substantial source in the
delivery of news or of the referral traffic that is part of the businesses of news media. There are
many news media organizations or business that has links to the proper websites of their
company that is displayed on the page of Google as a necessary part.
There are a few issues that still need to be discussed despite all that Google has been able
to achieve in Australian as well as all over the world. Google does not share the key algorithms
that they use for their operations. The lack of a level of transparency along with the various
factors that influence the results that are being displayed on the result page of the search engine
of Google and the content that surfaces on the news feed of the company are serious issues to be
checked by the government5. The aspects of lacking proper transparency make it very hard for
the advertisers to have a clear understanding of the influential factors that has an impact on the
display of the advertisement to the targeted consumers. It is quite difficult for them to understand
too the notion that whether the company Google is biased or is favouring a business on which
they have a personal interest, but it is done at the expense of the advertisers. ACCC has been able
to appreciate the importance of the minimization of the opportunity for the business to be able to
‘game' all key algorithms. However, the appropriate amount of balance, which has been struck to
avoid all possible risks as well as ensuring that all the advertisers are being informed
appropriately, is not very clear. The Section 46 of the Competition and Consumer Act 2010 is
breached by Google as it had monopolized the market for harming the operational processes of
5 Pollock, Rufus, "Is Google The Next Microsoft: Competition, Welfare And Regulation In Online Search"
(2010) 9(4) Review of Network Economics

ADVANCED LAW ELECTIVE - RESEARCH TASK7
search engine optimization6. There is no healthy competition as the market is owned by one
company that is secretive towards the consumers, clients, users as well as the government.
Discussion
The key objective of the report is to identify the wide range of the possible impacts of
Google in terms of its power over the market and distribution channels. The way Google has
transformed the concept of communication and accessibility of news and advertising procedure,
it is challenging to find out possible issues that are related to market power and issues in digital
platform7. The ACCC Digital Platform Inquiry report states that Google has the maximum
market power as an online search engine machine, online advertising tool, and news referral. As
per the report of ACCC Digital Platform Inquiry Google has held the maximum market power in
the Australian market and has a huge impact on Australia business. The various organizations in
Australia are relying on Google as it can attract a large number of users.
Google regulates the online advertising market and also give a chance to business
entrepreneurs to advertise their product and services on their page. The way Google dominates
the total online marketing activities in Australia are:
 Google was seen to have systematically given an illustrious placement to its own (Google
shopping) and to have downgraded the rival-comparison shopping services in its search
results.
6 Ma, Buqing, et al., "Online Search-Based Advertising Strategy For E-Business Platform With The
Consideration Of Consumer Search Cost" (2017) 46(2) Kybernetes
7 Luca, Michael, et al., "Does Google Content Degrade Google Search? Experimental Evidence" [2015]
SSRN Electronic Journal

ADVANCED LAW ELECTIVE - RESEARCH TASK8
 As per the ACCC digital platform Inquiry, Google has the maximum market power, and
Google has implemented monopoly strategies in online search and online advertising.
For the misuse of market power provision, it is vital to say that market power does not exist
in the market. The prohibition or other harms in the competition is reported in taking place as
Google is the biggest threat to personal information. Google apps like Youtube and Google + are
totally against Gab8. Google closed a partnership with Twitter helps Google to control all
android apps that are available in the play store. Google is one of the biggest monopolies around
the world.
As per the ACCC report, Google has the dominant gateways between media business and
audiences. ACCC also identified that there is a shortage of efficiencies on their operation and
they are restricted to lesser regulation than media businesses9. Media outlets play a major role in
maintaining the editorial process and in resourcing the editorial content. However, the new
articles are consumed on Google on a story by story basis and the total factor act as obstacles for
the traditional media business. ACCC has recommended a review of the regulatory structure to
apply across all entities that give comparable activities in the production of news and editorial
content in Australia. A regulatory authority is created to monitor and regulate the ranking of
editorial contents and news by digital platforms that earn higher revenue in Australia.
8 Daly, A. and A. Scardamaglia, "Profiling The Australian Google Consumer: Implications Of Search Engine
Practices For Consumer Law And Policy" (2017) 40(3) Journal of Consumer Policy
9 Chesnes, Matthew and Ginger Zhe Jin, "Direct-To-Consumer Advertising And Online Search" (2019)
46 Information Economics and Policy

ADVANCED LAW ELECTIVE - RESEARCH TASK9
Another factor that ACCC found on their report that consumers feel uncomfortable and
worried about the ways digital platform operators use and disclose their information10. To sort
out these issues, ACCC has recommended some necessary steps like the right to ensure in some
certain circumstances; higher penalties can be charged for breaches the privacy laws.
The potential implications of the findings in Google are significant, and it enables a high
amount of risk of contravention of section 46 of the CCA, which forbids corporations with a
substantial rate of market power from capturing in conduct that has the purpose of substantially
lessening competition.
Bloated AD groups are other issues in Google in the world of digital marketing. The bloated
Ad groups are the Advertisements that have too many keywords11. The keyword is the vital
element that determines which advertisement is shown when the keywords are triggered. The
time consumer sees a range of keywords they start losing the interest as the consumers feel they
are not relevant. The inappropriate advertisements that are on Google are showing age
inappropriate advertisements for all consumer, Adult content, gambling, counterfeit goods,
offensive advertisements, dangerous products like fireworks. The advertisements also sometimes
trick to click procedure. Where the click here procedure will be immediately flagged.
Sometimes the advertisements also have too many exclamation points.
The ACCC has revived the call to introduce a serious invasion of privacy. The report mainly
highlights the various practices of Google in terms of its monopolistic strategy and market
10 Bilal, Dania and Jacek Gwizdka, "Children's Query Types And Reformulations In Google Search" (2018)
54(6) Information Processing & Management
11 Bilal, Dania and Jacek Gwizdka, "Children's Eye-Fixations On Google Search Results" (2016)
53(1) Proceedings of the Association for Information Science and Technology

ADVANCED LAW ELECTIVE - RESEARCH TASK10
power. The report also focuses on the digital platforms activities and the contribution of Google
in terms of collection and unequal bargaining power also Google’s contribution on disclosure of
information12. There is no doubt that Google holds a very strong position on the internet. Under
the Act, the business automatically provides the customer with a basic set of roles for defining
the purchase of services and goods. The consumer are ensured of replacement if the product
breaks easily and don't perform as expected. The consumer are modified in a way: when the
consumer has issues with the goods and services that they bought and also failed to meet the
consumer guarantees. Consumer guarantees are applied to all the goods and services irrespective
of their nature and prices. A consumer need not be an individual or a group; a consumer can be a
business organization as well. Under the consumer guarantee, some basic criteria need to be a
match
 The goods or services must cost up to $40,000
 The goods or services, which cost more than $40,000 for personal or domestic use.
However, the consumer guarantees will not work on certain issues like if the consumer or an
organization buy goods for resale purpose and the goods are that are purchased transformed into
a different product sold by the consumer in such cases the consumer guarantees will not be
applicable. There are some certain circumstances when goods sold to the customer:
 Goods should be acceptable quality
 Goods must be fit in nature for any disclosed purpose
 The goods should match the mention criteria
 Goods must be matched to the demonstration and sample
12 Aziz, Arslan and Rahul Telang, "Consumer Tracking And Competition In Targeted Advertising"
[2017] SSRN Electronic Journal

ADVANCED LAW ELECTIVE - RESEARCH TASK11
 Good should fulfil the additional purposes that are made by the seller to them.
It has been identified already that Google favours the businesses with whom they are related.
They have the incentive and the ability to give special importance to the businesses with which
they have an earlier connection. The discrimination of the anti-competitive aspect is present in
all of the digital platforms across the globe. Google gave a prominent placement to the shopping
service in their search results. It have simultaneously demoted all the rival shopping services that
stood as competition13. The company has a monopoly over the supply chain of the digital
advertisement too. Characteristics such as this become the reason for the breaching of Section
46. The section states that the company that has substantial power cannot influence the
competitive stance of a rival company in the national or the international market, but Google has
been doing just that. Therefore, it can be stated that The Company breached section 46 in
Australia regarding the advertisement and marketing segments14. Furthermore, the preliminary
report was able to present that the company breached certain consumer and competition laws and
Google is under an investigation by ACCC on five different allegations on which actions might
be necessary.
Conclusion
The report that was published by the Australian Competition and Consumer Commission
was able to allege that Google has been liable for the deception or people and for misleading
13 Alkarablieh, Ala’ A., "The Impact Of Using Google Search Engine And Yahoo Bing Network On
Attracting New Customers Online And On The Effectiveness Of Online Advertisements" (2016) 8(3) International
Journal of Marketing Studies
14 Chesnes, Matthew and Ginger Zhe Jin, "Direct-To-Consumer Advertising And Online Search"
[2016] SSRN Electronic Journal