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Google on the ACCC Digital Platforms Inquiry

Technology has provided significant opportunities for Australian consumers and businesses. And the potential upside is huge - research suggests that Australia stands to gain $1.2 trillion in economic benefit between 2015 and 2030 if it can successfully drive investment in productivity-enhancing technology.

The Australian Competition and Consumer Commission’s Digital Platforms Inquiry (DPI) explored the pace of digital transformation within the media sector and across the Australian economy. Last week we provided a submission as part of the Treasury consultation process on the DPI Final Report.

This process provides an opportunity for Australia to consider its place in the global digital economy and to review the rules of engagement between Australian consumers, businesses, and technology providers.

In Australia, Alphabeta estimated that to date in 2019, Google Search, grants from Google to the non-profit sector, and Google advertising tools have helped connect more than 1.1 million businesses, website publishers, and non-profits to consumers globally. The benefits realised by businesses using Google’s platforms enabled them to support up to 116,200 jobs in Australia, two-thirds in small and medium-sized businesses.

Google’s technology helps Australians find information and create content. More than one hour of Australian content is uploaded to YouTube every minute and, on an average night, Google Search and other Google tools like YouTube help Australian students research answers to 25 million homework questions.

Our ability to create products that are useful and successful relies on carefully balancing the interests of our users, publishers, and advertisers.

For consumers, we need to ensure that we provide the most relevant results and also ensure we keep their information safe and private - over the last 10 years Google has developed innovative privacy tools like Google Account and Google Takeout, which give consumers greater transparency and control over their data.

For publishers, large and small, we provide the ability to monetise their content with advertising and send over 24 billion visits (or clicks) to news publishers every month globally - that adds up to 9,000 visits a second.

For advertisers, again large and small, we need to ensure that we deliver effective advertising solutions across Search, YouTube and the Google Display Network. For Google to succeed, all three stakeholders need to succeed.

Google supports the DPI’s objectives to promote public interest journalism and digital media literacy, foster a dynamic and competitive digital ecosystem, protect consumer privacy, and drive greater understanding of data collection, but notes these should be balanced with the interests of consumers and wider social and economic objectives.

Google is broadly supportive of many of the Final Report's 23 recommendations, but some require further analysis on the associated costs and benefits. Two recommendations are of particular concern, specifically changes to Android defaults and aspects of the proposed publisher code.

Firstly, the recommendation to directly intervene in the Android operating system does not take into account Australian market conditions and competition laws, and provides no justification for focusing on Android when Apple’s iOS is the most-used mobile operating system in Australia (as noted in the Final Report) and Microsoft’s Windows remains the most-used PC-based operating system.

Secondly, the proposal for regulator-sanctioned negotiation of revenue sharing between platforms and news publishers - as part of the code contemplated by Recommendation 7 - overlooks existing commercial arrangements between Google and Australian news publishers and the broader value that Google provides through referred web traffic and technology.

In total in 2018, Google sent more than 2 billion clicks to Australian news publishers from Australian users, and more than 1 billion additional clicks to Australian news publishers from users globally. Our Google News Initiative supports news publishers of all sizes to develop, test and implement innovative approaches to drive revenue for publishers and support greater media literacy among consumers. Recently we made ranking updates and published changes to our search rater guidelines to help better recognise original reporting and surface it more prominently in Search.

Google welcomes the opportunity for further consultation. We look forward to continuing to engage with all interested parties, including Government and industry, in the coming weeks.