Google search costs economy $430m a year, says Microsoft-sponsored group

By John Hilvert on Sep 23, 2011 1:28 PM
Filed under Services

Urges more competition in search.

Google's dominant position in search could be costing Australians up to $430 million in "lost time", according to the latest salvo by Microsoft-sponsored lobby ICOMP.

The group filed a submission to the Productivity Commission's retail industry inquiry prepared by economic consultancy ACIL Tasman.

The submission argued that Google had the incentive and ability to reduce the "efficiency of search" in order to drive more business its way.

“We estimate that, if this incentive is acted on and search efficiency is reduced by 10 percent, the annual cost to Australians in terms of lost time would be approximately $430 million,” the report alleged.

ACIL Tasman alleged that about $1.5 billion in gross national product improvements could be had in Australia by improving competition between online search providers.

It was the latest muscle-flexing by ICOMP in a coordinated campaign that has also seen it demand intervention by the consumer watchdog ACCC.

Google this week survived an earlier long-running suit from the ACCC over the distinguishment of sponsored links from organic results.

An ICOMP spokesman declined to comment on the arrangements between it and ACIL Tasman for production of the report, citing "commercial in confidence".

A Google Australia spokesman said the figures seemed hypothetical, drawing an inference of inefficiency because users and marketers were seen as blindly reliant on Google.

The spokesman referred additional questions to a prepared fact sheet that asserted there was nothing that said people had to search Google to get to anything else on the Internet.

"Users can type in a website directly. They can can ask their friends on Facebook. They use Twitter or Amazon and more..," it said.

Meanwhile, Google’s potential abuse of its dominance is being aired in hearings before a US Senate sub-committee.

As one report observed, committee members seemed to agree that Google enjoyed an excessive concentration of market power. However it was less clear what was to be done about it.

 
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