ACCC Investigates Influence of AI on Internet Search

The Australian Competition and Consumer Commission (ACCC) has announced the commencement of a comprehensive inquiry into search competition, with a specific emphasis on the role and impact of generative artificial intelligence (AI) in internet search services. This inquiry underscores the growing importance of AI technologies in shaping digital markets and their potential implications for competition and consumer welfare.

Generative AI, which encompasses advanced machine learning techniques capable of creating new content, poses unique challenges and opportunities in the context of internet search. The ACCC aims to examine how generative AI algorithms are utilized by search engines, their effects on search results, and any potential anti-competitive behaviors or outcomes associated with their deployment.

The inquiry will delve into various aspects of search competition, including market dynamics, consumer preferences, innovation, and the competitive landscape. By investigating the impact of generative AI on search, the ACCC seeks to ensure that competition in the digital ecosystem remains vibrant, fair, and conducive to consumer choice and innovation.

Through this inquiry, the ACCC aims to gather insights from stakeholders, industry participants, and experts to inform its understanding of the evolving search landscape and identify any regulatory interventions or policy recommendations that may be necessary to safeguard competition and consumer interests in the digital age.

The ACCC’s interim Digital Platforms Report highlighted Google’s dominance in the Australian search market, attributing it to factors such as its control over the Android operating system and its agreements with Apple to be the default search engine on Safari browsers. Since then, the introduction of generative AI technology represents a significant development in the search landscape.

However, despite this technological advancement, recent data suggests that little has changed in terms of Google’s market dominance. While there has been a slight decline in Google’s market share on desktop devices, from 89 percent to 86 percent, its control of the mobile ecosystem remains overwhelmingly strong, with a market share of approximately 98 percent.

These findings underscore the persistent challenges posed by Google’s dominance in the search market and highlight the need for continued scrutiny and regulation to ensure fair competition and consumer choice in Australia’s digital economy. The ACCC’s inquiry into search competition, with a focus on the impact of generative AI, will provide valuable insights into these dynamics and inform future regulatory actions aimed at promoting competition and innovation in the digital sector.

The Australian Competition and Consumer Commission (ACCC) is focusing its inquiry into generative AI and large language models (LLMs) specifically on their impact on the search market, given ongoing inquiries and consultations related to AI. These include the “Safe and Responsible AI” consultation, the inquiry into AI in education, and reports from the Digital Platform Regulators Forum.

The ACCC acknowledges that AI could either strengthen Google’s dominance in the search market or potentially disrupt it. While early experiments by competitors like DuckDuckGo’s DuckAssist and NeevaAI have been discontinued, the ACCC remains interested in exploring how AI technologies might shape the future of search.

ACCC chair Gina Cass-Gottlieb highlighted overseas market developments, including new laws in the EU and the UK, which impose obligations on “gatekeeper search engines.” The ACCC will assess the effectiveness of such legislation and consider its potential application in Australia to promote competition in the search market.