ACCC urged to battle Google

Microsoft-sponsored lobby group ICOMP has strenthened its Australian muscle with a two-day blitz in Canberra that pressed for the use of competition laws to rein in Google’s dominance in search.

The lobby group sponsored a visit to Australia by the founders of vertical search engine Foundem and was also a major sponsor for an Australia Institute research paper.

The Australia Institute paper argued that online commerce in Australia could be hurt by Google’s monopoly, user understanding of the significance of paid advertising and potential biases in search rankings.

Foundem, which once alleged it had been cut from Google search results, was one of a handful of firms to file complaints with European regulators that led to an antitrust investigation of Google.

Earlier this year, ICOMP also made submissions to the Productivity Commission’s inquiry into the Economic Structure and Performance of the Australian Retail Industry and recommended ACCC open a formal inquiry into Google’s practices and market dominance.

ICOMP's move to gain the attention of Australia's competition regulators and policy makers indicated a taste for a new search engine battle.

It was unclear whether the push was linked to plans by Microsoft to relaunch its Bing search engine in Australia later this year.

ICOMP maintained on its website that it was not a "mouthpiece for Microsoft", saying it represented the interests of 40 companies, including Foundem.

A 2009 ICOMP presentation listed Microsoft as the sole trustee of ICOMP, g.

Former ACCC chair, Alan Fels: be vigilant

ICOMP convened a Canberra Forum inviting officials from the Australian Consumer & Competition Commission (ACCC), Department of Broadband and the Digital Economy (DBCDE) and Department of Innovation on the topic “Innovation and the Digital Economy: A Regulatory Challenge?”

The meeting featured former ACCC commissioner Alan Fels, who set the tone of the forum by urging more scrutiny of search engines.

“We should be vigilant as to anti-competitive messages [from] search engines that can detrimentally affect web content, foreclose competition or inhibit content owners from doing business with competitors," he said.

"There are concerns of transparency that can deceive consumers which can inhibit Australia’s digital economy."

Fels deferred remedies to a panel comprising Foundem founder Shivaun Raff who was also a special adviser to ICOMP; Billy Tucker CEO of group buying site CUDO's CEO Billy Tucker (formerly of Microsoft); Peter Strong of the Council of Small Business of Australia, Paul Simos of the REA Group; and UniSA Professor David Round, an expert on competition law and member of the Australian Competition Tribunal.

The panel agreed on the need for consumer education but was hesitant about the need for more regulation.

The Council of Small Business' Strong argued that existing competition rules needed to be enforced.

He said the ACCC “was afraid to go out and take on the big players".

"We need to go out there and be more aggressive in enforcing what we currently have and say, 'We are going to fight and fight hard to make sure this is fair and transparent'," he said.

“We have not done that for 20 years. We must start doing it now.”

Google Australia was represented at the forum but did not participate in the discussion.

The representatives declined to speak to iTnews, pointing to a September 2010 opinion by Google Fellow Amit Singhal that laid out Google's position.

Foundem's hope for an outcome

Raff accused Google of unfair and anti-competitive tactics from 2006 to 2009, which she said hurt Foundem’s vertical search business through unfair penalties, unfair search rankings and tardiness in responses.

Raff wanted Google to be more open in search listings and sought faster appeals against Google mistakes that penalised sites as spam.

She said that that European and North American regulators would have to act in the light of their case studies and research.

“We are confident that we have based a strong fact-based case to provoke concerns by regulators. US has shown interest in the area as well,” Raff said.

The European Commission's investigation would “ultimately result in Google introducing measures that will start to deliver the remedies we have asked for, possibly by early 2012.”