As Google throws its weight around, should SMEs call for a break up or a make up?

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Google has threatened to pull out of Australia amid negotiations for a digital news code which would force Google and Facebook to pay news media companies for content.

While Google Drive, Google Maps and Gmail would still be accessible, searching Google for business listings, news articles, and information about your latest health scare would no longer be possible.

Despite search engine alternatives such as Bing, Yahoo, and DuckDuckGo, some say the change would decimate small businesses, while others say Google’s threat shows just how important breaking up such a powerful company is.

What value does Google bring?

There are more than 2.3 million actively trading businesses in the Australian economy. The vast majority of them are small.

In 2018-19, businesses that don’t employ anyone, such as freelancers and sole traders, accounted for 62.8% of all businesses in 2018-19, while 69.1% of employing businesses had between one and four employees.

Of all businesses, 93% had a turnover of less than $2 million.

Small businesses rely on Google, which accounted for 91.28% of online searches in Australia in December 2020, for listings and reviews.

During the pandemic, many customer-facing businesses had to shut their stores and offices, shifting to online sales and services. For this, they relied on Google to funnel shoppers to their sites.

Demand for online digital skills training through Google My Business doubled when Australia went through its first lockdown.

In September, the federal government announced $419.9 million in grants for businesses to update their digital systems and another $20 million to help small businesses improve their digital capability.

Monopolies need to be broken up

Council of Small Business of Australia CEO Peter Strong told Crikey Google’s threat showed just how important it was to break up its monopoly.

“This threat has really reinforced the need to fix the problem of one company having such a stronghold over businesses,” he said.

“Google has sent us a huge message which is don’t rely on one provider.”

Strong says that while not having Google would cause some headaches, businesses were adaptable.

“There are other search engines and businesses are amazing at how they respond to crises,” he said.

He supports the Australian Competition and Consumer Commission’s (ACCC) code presented to Google and Facebook and said action should have been taken earlier to limit Google’s power.

“They say let the market decide, we say make sure the market can decide,” he said.

Strong thinks one solution would be to develop different search engines for different industries and have the government create search engines for its portfolios such as finance and defence.

Hard times for small businesses

Digital marketing company Localsearch’s director of digital and growth Adam Boote isn’t so optimistic, warning the move would kill businesses.

“If Google turns off their search engine, businesses will be required to start from scratch with their marketing,” he said in a statement.

“Organic Google searches is one of the only online platforms where even the smallest business can compete with the big corporations.”

Google Australia managing director Mel Silva told a Senate committee on Friday that withdrawing Google’s search engine wasn’t a threat, but a “worst-case scenario” if the code went ahead.

She said the code was untenable and presented an unmanageable financial and operational risk.

“Withdrawing our services from Australia is the last thing that Google wants to have happen, especially when there is another way forward.”

This article was first published by Crikey.


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