Google should be broken up to restore a level playing field for media companies swamped by its “overwhelming” market power, News Corp has told the competition regulator.
Rupert Murdoch’s Australian arm has argued in a submission to the Australian Competition and Consumer Commission that Google’s search engine and third-party advertising platform be separated to make it easier for digital publishers to compete for advertising.
Alphabet, Google’s parent, is in a high stakes battle with News Corp as the global media company struggles to claw back the billions of dollars in advertising revenue which has flowed to Google from its newspapers in the past decade.
The latest suggestion is an interventionist step which the ACCC stopped short of recommending in its preliminary report on the digital platforms inquiry in December.
“Google operates in a ‘walled garden’ whereby its related businesses, particularly in the ad tech pipeline, secure and entrench Google’s dominance in general internet search,” News Corp said in its submission, released on Tuesday.
“Google’s market power across the ad tech services supply chain is overwhelming.”
Ad tech services are all the products Google offers advertisers – from Google Ads to Google Marketing and Google Ad Manager – which combine seamlessly with its “trove of personal data” to make it attractive for advertisers.
News Corp says this “impenetrable offering” allows Google to dominate, and it should be forced to divest.
“Divestments will work to correct the market structure, by replacing common ownership with separate ownership, where each separate owner has incentives to compete to gain the business of customers,” the submission says.
“News Corp Australia recognises that divestment in a non-merger context is a highly interventionist measure and will have significant ramifications.
“Accordingly, News Corp Australia recommends that this remedy should take the form of an ACCC recommendation to government, following the conclusion of the inquiry, and should be limited to Google.”
Speaking on Sky News about the market concentration of the digital giants, Labor’s digital economy spokesman, Ed Husic, did not rule out a future Labor government in Australia taking action against Facebook, as the United States examines whether anti-trust laws should be used to break up the tech giants.
“It is something that we will be watching with great interest,” Husic said.
He warned that a “day of reckoning” was coming for Facebook, if it did not correct its behaviour.
He said the company had failed to respond adequately to concerns it was used to influence the 2016 US election campaign, or how Cambridge Analytica used its data.
“Frankly now, as a result of their failing to act responsibly, you have US lawmakers seriously entertaining the notion of whether or not they use anti-trust laws to break them up and Facebook has got a day of reckoning that is coming as a result of being so big,” he said.
“They are not a plucky startup anymore, they are a big player that are influencing the way in which markets operate, and I think it is something that we look at seriously.”
Husic said the recent case of presidential candidate Elizabeth Warren, who has suggested Facebook, and other digital giants, be broken up as part of her election campaign, having her advertisements blocked by the social media platform was an example of the power it held.
“When I have said to Facebook previously, there is some Islamaphobia content on its site directed to me personally [which] was over the top, I asked them, ‘do your community guidelines allow this to occur’, they said, ‘yes, it would be within the guidelines’, and yet, if you have an ad that says something bad about Facebook, bam – it gets taken off in a moment’s notice,” he said.
The chairman of the ACCC, Rod Sims, is conducting an inquiry into the impact of digital platforms on competition in media and advertising in Australia. The final report is due on 30 June.
