Google needs to offer browser, search options on Android: ACCC

If Google refuses to allow Australian Android users to choose their default browser and search services from a number of options, the government should step in and force the company to, the Australian Competition and Consumer Commission has said.

The recommendation was contained in the final report of the ACCC’s Digital Platforms Inquiry, published today. The ACCC called on Google to implement a system similar to the one it is rolling out in Europe in response to antitrust concerns.

In July 2018, the European Commission fined Google €4.34 billion for making handset-markers install its search engine and browser on devices they manufactured.

Google in April this year announced it would start displaying “new screens to Android users in Europe with an option to download search apps and browsers.”

“These new screens will be displayed the first time a user opens Google Play after receiving an upcoming update,” Google product management director Paul Gennai wrote in a blog entry.

“Two screens will surface: one for search apps and another for browsers, each containing a total of five apps, including any that are already installed. Apps that are not already installed on the device will be included based on their popularity and shown in a random order.”

“Users can tap to install as many apps as they want,” Gennai wrote. “If an additional search app or browser is installed, the user will be shown an additional screen with instructions on how to set up the new app (e.g., placing app icons and widgets or setting defaults). Where a user downloads a search app from the screen, we’ll also ask them whether they want to change Chrome's default search engine the next time they open Chrome.”

“The ACCC considers that offering this choice screen for Australian consumers, for both search engines and internet browsers, would improve consumer choice and be pro-competitive,” the ACCC argued.

“Consumers who may not otherwise be aware of alternative offerings would be provided with information on alternative options, at no cost to the search engine provider or internet browser provider. This would also lower barriers to entry and expansion for those search engine suppliers and internet browser suppliers.”

Offering a variety of search and browser options would help overcome “customer inertia”.

Google search is the default on the company’s Chrome browser as well as Apple’s Safari, which the ACCC said together accounted for around 80 per cent of the local browser market.

The estimated US$12 billion that Google forked out for default search status in Apple’s Safari status reflects the value of being the default option, the ACCC said.

Google in its response to the ACCC’s preliminary report, released in December, said that Chrome faced “strong competition” from other browsers and argued that it was easy for users to switch browsers and search providers.

Google faces “significant competition for distribution of Chrome,” the tech company argued, citing as examples the inclusion of Microsoft’s Edge browser on PCs that run Windows and Apple’s Safari on iOS and MacOS devices.

The company acknowledged that although “many Android OEMs” preload Chrome and have it as the default that is “by choice,” noting that, for example, Samsung preloads its own browser on mobile devices alongside Chrome.

The revenue that funds competition in browsers mostly comes from selling the default search setting, Google said.

The company’s search service has not always enjoyed default status, Google argued, noting that at one stage Apple had Bing as the default for Siri, and the iOS and MacOS search bars, as well as Mozilla and Brave striking deals with Yahoo! and Qwant, respectively.

“It is not clear from the Preliminary Report that the ACCC consulted with the browser developers, device makers, and operating system developers whose business models could be adversely impacted by these recommendations,” Google argued.

In the preliminary report  the ACCC indicated it was considering a broader mandate that the suppliers of operating systems for mobile devices and PCs be forced to offer a choice of browsers rather than providing a default browser, and that browsers offers options for search engines rather than having a default selected.

The ACCC said that although the preliminary recommendation could improve competition, it may also have had negative effects.

“For example, it could raise barriers to expansion for existing smaller suppliers of search services that are vertically integrated with an internet browser, which could further entrench Google’s position in the browser market,” the final report said.