Startup Analysis

As the ACCC drags Google to court, should Aussie startups be taking notes?

Stephanie Palmer-Derrien /

ACCC Google

Right Click Capital partner Benjamin Chong.

The Australian consumer watchdog is suing Google, alleging the US tech behemoth engaged in “false or misleading representations” on Android devices, regarding users’ personal location data.

Specifically, the Australian Competition and Consumer Commission (ACCC) alleges that when users set up their accounts, Google did not disclose that location data would be collected, kept and used when the ‘web and app activity’ setting was switched on. The watchdog claims users would have assumed that switching off the ‘location history’ setting would stop Google from collecting location data.

“Many consumers make a conscious decision to turn off settings to stop the collection of their location data, but we allege that Google’s conduct may have prevented consumers from making that choice,” ACCC chair Rod Sims said in a statement on Tuesday.

It’s a landmark case, and the first serious swing at the global tech conglomerates following the ACCC’s Digital Platforms Enquiry.

But, while some in the Aussie tech space will simply enjoy watching Google squirm, the case may well mark a change in the tide. Anything that affects big tech companies is likely to trickle down to small tech companies, too.

Speaking to StartupSmart, M8 Ventures founder Alan Jones says as far as he’s aware the startup community isn’t following this case particularly closely, “except with a little gravitorial combat spectator, ghoulish interest in the outcome.”

“A lot of us work in parts of the startup industry where Google, Facebook and all of the tech giants have significant influence on how we acquire our customers and how much it costs us to acquire a customer,” he explains.

At the same time, many startups are either competing with some of the services those tech giants provide, or worrying the day will come that they are. There’s always a risk that the gargantuas could move into their space and “crush us”, Jones notes.

So, for now at least, startups are largely observing with interest and “looking to see Google shed some blood over this”, he adds.

“They’re hoping there will be a spectacle to watch.”

That said, there are folks in the startup space who may well be keeping a closer eye on developments, including legal counsel and chief operating officers, for example, at scale-ups.

These are companies that already have a strong customer base, and which are making money.

“Google has a lot of customers in Australia and is making a lot of money selling ads that are further targeted according to the data they’ve been capturing,” Jones says.

If you’re a scale-up that also has a significant Australian customer base, “maybe it’s time to start paying closer attention to what your startup is doing with user data”.

ACCC Google

M8 Ventures founder Alan Jones. Source: supplied.

Google as a utility

When it comes to responsible data protection, Benjamin Chong, partner at Right Click Capital, tells StartupSmart he sees the need for a “three-pronged approach”.

First of all, “there needs to be a base level of education”, he says.

It’s important for users to understand what data is theirs, and what it could potentially be used for.

Then, there’s an onus on the platform or service itself to help users “make informed choices” when they’re using it, and a responsibility for the regulator to enforce this. Service providers such as Google are becoming “like utilities”, Chong explains.

“You have to make use of them, you’ve got no choice. It’s crazy not using a Google Maps or equivalent to be able to find where something is, or not using a search engine to be able to locate information.”

This case could be a turning point in the conversation, he suggests. It’s feasible that in the future, clarity around data use will be front of mind for consumers, and therefore it should be for startups, too.

“I think the best practice is to have clarity with your users,” Chong says.

“We’ve heard for a long time that data is the new oil,” he adds.

But, just as oil companies face regulation around pollution and protecting the environment, mining of data needs to be controlled, too.

“Users need to have an education so that they’re able to make informed decisions, and then they need to have access to tools in order to know what people are storing, and have the right to delete such things,” Chong argues.

For startups, data privacy should be high-priority from the offset, Jones says.

“I think it should definitely influence how they plan to gain user consent to do this and how they inform the user of what they intend to do with the data,” he says.

Privacy policies — and sometimes terms and conditions in general — can be an afterthought for tech founders.

“It needs to come further to the fore,” Jones says.

Even though, no matter how simple they are to understand, many users still won’t read such policies, “we need to show that we’ve made them easy to understand, and specific, and current and up to date”, Jones explains.

“It’s really not good enough to start with an MVP when it comes to a privacy policy,” he adds.

Every user you acquire is subject to those terms. And while you can update them later, it’s often tricky to get users to consent to something new.

“Better to start at the beginning with a good set,” Jones says.

That said, this is by no means an insurmountable hurdle. Of all the things founders should be thinking about right off the bat, getting your terms and conditions straight could, potentially, be an easy one to cross of the list.

All the industry needs, Jones says, is a plain-English, straightforward, open-sourced templates for terms-and-conditions documents, that can be easily customised.

“We can solve a lot of the problems here by publishing open source templates for others to follow,” he says.

A Faustian bargain

This ACCC-Google debacle arrives at a time when data and privacy is particularly topical.

It comes in the same week that Peter Dutton’s Department of Home Affairs suggested using facial recognition artificial intelligence technology to verify the age of those viewing pornography online — a measure that was quickly shot down and widely criticised.

There’s a shift in sentiment here, Chong says.

“There’s been a real ‘aha’ moment that we do not want a situation in Australia like what is happening in Hong Kong, where to protect our privacy we need to walk on the streets with face masks,” he says.

There are many Aussie expats in Hong Kong, he explains, and a dawning realisation that “we don’t want all our faces in these databases that people without a proper court warrant are able to search”.

Tech companies have a role to play in developing technology responsibly. And, if they want to grow into a trusted brand, they may have to.

“With education we can give autonomy to the user. And then, the more transparent an organisation is the greater the level of trust,” Chong says.

Jones also expresses concern about the direction in which facial recognition technology is going.

“I personally am greatly, deeply concerned about the way facial recognition data capture is being rolled out, how it’s being shared among multiple agencies, how it’s very likely to be also shared with private enterprise, and how it’s very likely not to have any safety controls to prevent stalking and privacy invasion,” he says.

But, as far as he’s concerned, he’s still in the minority.

“I think there’s a general uptick in people’s level of concern about it, but I think we’re still a long way away from the average Australian deciding to take action,” he explains.

“They’re broadly aware of the terms of the Faustian bargain they’ve made.”

So far, the general population is not quite outraged enough to reach a tipping point and to take real action, he suggests.

“There’s a tremendously frustrating aspect of Australian culture, which is resignation,” he adds.

“We’re not a great nation when it comes to acting on things.”

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Stephanie Palmer-Derrien

Stephanie Palmer-Derrien is the editor at StartupSmart. You can contact her at [email protected].

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