News Corp, the Australian arm of Rupert Murdoch, has suggested the competition regulator of the country that it is essential to break up Google in order to create a level playing field for media companies that is being over powered by its “overwhelming” market power.
In order to make it easier for digital publishers to compete for advertising, authorities should break up Google’s search engine and third-party advertising platform, urged News Corp in its submission to the Australian Competition and Consumer Commission.
News Corp and Google’s parent company Alphabet are entangled in a pitched battle over lost advertisements for the global media company as the later attempts to regain advertisements worth billions of dollars that it has lost out to Google from its newspapers over the last decade or so.
This latest argument by news Corp is being viewed as an interventionist step which was not included in the recommendations of the ACCC while preparing its preliminary report on an inquiry into the digital platform that was started in December last year.
“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 a range of products that are offered to advertisers by Google and include the likes of Google Ads, Google Marketing and Google Ad Manager. These are attractive for advertisers because they offer a “trove of personal data” to act on more specifically for advertisers.
This “impenetrable offering” allows Google to dominate, argues News Corp, which also added therefore Google 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.”
A future Labor government in Australia taking action against Facebook was not ruled out by Labor’s digital economy spokesman, Ed Husic, while speaking on Sky News about the market concentration of the digital 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.
Questions about Facebook being used to influence the 20-16 US presidential elections and the use of personal data by Cambridge Analytica have not been adequately answered by Facebook, he said.
“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.”
(Adapted from TheGuardian.com)