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What consumers expect from the ACCC investigation into Google and Facebook
Aug
Yesterday, the Australian Competition and Consumer Commission (ACCC) shot research on digital platforms including Google and Facebook.
ACCC Chairman Sims Rod he said:
The ACCC will be closely monitoring long-term trends and the impact of technological changes on competition in media and advertising.
We will also consider the impact of information asymmetry between digital platform providers and advertisers and consumers.
The study is overdue. To be useful, it should recognise that consumer protection law can play a bigger role than it does now in addressing the power of platforms in the digital economy. Those who lead it need to ensure that its results truly benefit consumers, not just media companies and businesses that rely on online advertising.
Read more: Confusion over Google’s paid services could land the company in trouble again
How Google presents information
To date, little attention has been paid to the issues Australian consumers face in online markets and in particular when searching the internet.
Our research focuses on what consumers see and experience when they utilize Google.
In the early days, Google’s search results page was essentially a combination of organic search results (those that result from Google’s algorithm, which ranks by relevance) and ads (a pay-per-click advertising model). This provided a relatively neat page, with each of the two main elements marked with labels and shading.
As Google has grown and its services have expanded, the Google search results page has become increasingly complicated, with several competing elements. Many of these search results elements come from Google’s subsidiary “vertical search” services, which provide users with a specific category of online content, such as Google Maps, Google News, and Google Shopping.
Our research shows that this causes confusion. We found that:
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Australian consumers have narrow knowledge of how different parts of a search engine results page work and where they come from
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consumers were best able to understand and identify paid ads compared to organic or affiliated listings
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there was particular confusion about the operation and origin of the Google Shopping service, as well as the origin of organic search results
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confusion seems to be more pronounced among older users and those without higher education.
These results highlight a gap in consumer knowledge about Google search that needs to be filled by the ACCC investigation.
Previous ACCC focused on Google
In 2011, the ACCC brought proceedings against Google for breaching the then Trade Practices Act 1974 (Commonwealth).
The ACCC alleged that by publishing or displaying several misleading sponsored links, Google was liable for misleading and deceitful conduct as the creator of those ads (the claim against the advertiser was settled). The ACCC also alleged that Google engaged in misleading and deceitful conduct by failing to distinguish sufficiently between organic search results and sponsored links.
The case went as far as High Courtwhich dismissed the case against Google. They found that the evidence against Google was never forceful enough to prove that Google personnel, unlike advertisers, selected relevant keywords or otherwise created, endorsed, or accepted sponsored links. Accordingly, Google is not liable as a creator of misleading and deceitful advertising content.
Judge Nicholas in Federal Court on Trial also ruled against the ACCC’s allegation that Google failed to distinguish between organic search results and sponsored links. It found that reasonable members of the public would understand that sponsored links are advertisements, which are distinct from Google’s organic search results.
As shown above, our research suggests otherwise. Despite this, victory over the ACCC in the Supreme Court in 2013Google should consider taking elementary steps to more clearly label different parts of its search results page, or risk legal action again.
A guide to the future
IN our last report In the Australian Consumer Law Review Paper, we advocated an evidence-based approach to all regulatory action under Australian Consumer Law.
We also argued that agencies such as the ACCC should consider introducing “best practice” guidelines for providers of online search engines and price comparison services regarding the utilize of labels and disclaimers to clearly indicate source and affiliation, in order to minimise the risk of consumer confusion.
Read more: Yes, your doctor can Google you
In the United States The Federal Trade Commission has issued similar guidance about how these services should operate and found that failure to properly distinguish between these different types of results could constitute a deceitful practice in breach of consumer protection laws. These guidelines provide a good starting point for regulatory agencies in Australia.
We also believe that further research is needed that focuses on how different factors affect the display of search results. We know that this can vary depending on the region, user preferences and settings, browsing history and the devices used (computer, laptop, tablet or mobile phone).
We believe there is potential for consumer law to play a more energetic role in the digital ecosystem to address the challenges that arise from gigantic and powerful platform providers like Google than has been the case before. Perhaps this investigation is a first step in that direction.
It will be significant, however, for the ACCC to separate the interests of consumers from those of companies that utilize Google to advertise and media companies. Sometimes these interests align, but not always. This can be seen in the recent European Commission investigation into Google’s alleged abuse of its dominant position in the search and advertising markets. These investigations led to a result that may benefit Google’s competitors more than consumers.
The ACCC should be careful not to reach the same result in its own investigation, it is expected that prepare an interim report in December 2018 and a final report in June 2019.
