The ACCC is seeking submissions from consumers and industry participants about choice screens, which give users a choice of internet search services on mobiles and tablets, rather than a pre-selected search service, and about the supply of web browsers in Australia.
The submissions to an issues paper, released today, will inform an upcoming report on the impact of default settings and pre-installation of search services and web browsers on consumer choice and competition.
The report, to be finalised later this year, will also outline the current roll out of choice screens for search services on Android devices in Europe and examine what measures other than choice screens could encourage competition and improve consumer choice for search services and web browsers in Australia.
Manufacturers usually supply desktops, tablets and mobiles with a pre-installed operating system, including a specific web browser. Web browsers, in turn, often select a default search service, which is embedded within the browser.
The Digital Platforms Inquiry Final Report found the Google Chrome browser is pre-installed on nearly all Android devices and that Google Search was the default option on Google Chrome and Apple’s Safari mobile browsers, making it the default search on over 95 per cent of mobile devices. It also found that substantial payments are made by Google to Apple for Google search to be the default on Safari.
A 2020 complaint filed by the US Department of Justice against Google claims that Google pays Apple an estimated US $8-12 billion to be the default search service on Apple Safari and on certain Apple services (such as Siri and Spotlight on the iPhone).
“We know that, in general, setting a default option substantially increases the likelihood that consumers and businesses will stick with that option. This can have the effect of reducing competition and consumer choice in the supply of these services,” ACCC Chair Rod Sims said.
“We would like to hear from consumers and businesses about the impact of the pre-installation of services and default settings on devices on their use of these services. We’re also interested in how the design of user interfaces on devices, such as widgets, search bars, and the steps required for a consumer to change a default search service, can affect how consumers use these services.”
“We’re also interested in competition in the supply of web browsers in Australia and the linkages between search services, web browsers, operating systems and devices. The relationships between suppliers, through vertical integration or contractual arrangements, may impact the supply of search services and browsers to Australians,” Mr Sims said.
Submissions to the issues paper can be made to digitalmonitoring@accc.gov.au by 15 April 2021.
Advice to government on Android Choice Screens
The report informed by these submissions will also include the ACCC’s advice on the roll out of the Android choice screen, as requested by the Australian Government.
The ACCC’s Digital Platforms Inquiry Final Report found that Google has substantial market power in search services in Australia. It found that Google’s position is largely insulated from dynamic competition because of high barriers to entry, including customer inertia and default settings.
The ACCC recommended that Google provide Australian users of Android devices with the ability to choose their default search service and web browser, as Google announced it would provide for Android users in Europe in April 2019, following a European Commission decision.
In August 2019, Google revised this proposal to provide a choice screen for general search providers on all new Android phones and tablets shipped in Europe. The choice screen will appear during initial device setup and will feature multiple search providers, including Google. These search providers are required to bid to feature on the choice screen.
In its response to the Digital Platforms Inquiry Final Report, the Australian Government asked that the ACCC examine Google’s roll out of the Android choice screen in Europe and report to the Government in 2021.
The choice screen report will be provided to the Treasurer by 30 September 2021.
Background
On 10 February 2020, the Government directed the ACCC’s Digital Platforms Branch to conduct a five-year inquiry into markets for the supply of digital platform services in Australia and their impacts on competition and consumers. The inquiry will produce reports every six months examining markets for the supply of digital platform services in Australia.
The report on choice screens for search services and web browsers will be the third report under this direction. The second report, focussing on app marketplaces, is due to be provided to the Treasurer by 31 March 2021.