ACCC Eyes Search Competition, Citing ‘Decreasing’ Quality & Rise In Generative AI

ACCC Eyes Search Competition, Citing ‘Decreasing’ Quality & Rise In Generative AI

The Australian Competition and Consumer Commission (ACCC) has launched a new probe into the quality of Australia’s search market and the competition within the space.

 The watchdog released an issues paper that seeks views about the level of competition in general search services and trends in search quality, including what consumers value in search services and the relationship between the level of competition in the market and search quality.

The impact of regulatory and industry developments, including the overseas introduction of choice screens and the emergence of generative AI, is also a focus.

“Significant changes have occurred since the ACCC last examined search services in 2021. We’ve seen new laws introduced overseas that place obligations on so-called gatekeeper search engines and the emergence of new technologies, like generative AI, that have changed the way consumers search for information online and may be impacting the quality of the service they are receiving,” ACCC chair Gina Cass-Gottlieb said.

“The ACCC wants to understand the impact of these developments on general search services and ultimately, how they affect competition and consumers.”

The issues paper said that while “the deployment of generative AI in search is still at an early stage and rapidly evolving” it could have a significant impact on the shape of the market.

“There has been some public speculation that LLM-based services could disrupt general search services provided by search engines by displaying more relevant, comprehensive, and direct responses to users. On the other hand, generative AI could also help large digital platforms, including the two largest providers of general search services, Google and Microsoft, to maintain and defend their market position,” read the issues paper.

The watchdog also noted that there had been a shift in market share on desktop search, with Microsoft’s previously-maligned Bing growing its share by four per cent.

The ACCC speculated as it released the issues paper that improved competition in search might have an impact on quality. However, it noted that mobile search is by far the most popular way for Australians to search.

The full report based on the issues raised in this paper will be released in September. It will also look at legislative reforms rolling out or being considered in the European Union, United Kingdom and other jurisdictions that place obligations on search engines to promote competition.

While the report will consider the emergence of AI-powered search engines and its potential impact on competition in the market for general search services, the ACCC’s consideration of generative AI will be limited to general search services. The report will not examine issues relating to generative AI more broadly, including privacy, online safety, or misinformation issues.

“We are eager to hear from businesses and consumers about their experiences with general search services to better understand how regulatory and industry developments are affecting the level of competition and consumers in the market for general search services,” Cass-Gottlieb said.

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