The Australian Competition and Consumer Commission’s legal action against Google could be a landmark of international significance in the fight for editorial integrity in the new media world.

The ACCC has accused Google of, among other things, failing to adequately distinguish between the “organic” search results that appear in response to a query, and sponsored links paid for by an advertiser.

This is the first case of its kind in the world. Google are notoriously secretive and arrogant in accounting for how they construct their algorithms. This case could force some disclosure.

For those who understand how news works in the online world, it has been clear for some time that Google’s algorithms are in the front line of the fight for the “church and state” division between editorial and advertising.

Google has become the world’s largest media company and one unlike any other, because it makes its money not from clumping audiences together in a mass and trying to keep them but by sending them elsewhere. People wanting to scan the news headlines with no particular aim in mind may go to an established news site, but when they want information on a particular topic in the news, they start with a search engine.

Data from Sandra Hanchard, the Asia Pacific analyst for the internet tracking company Hitwise, proves the point. In March 2006, when Federal Parliament was preparing to vote on the abortion pill RU486 and controversy was raging in the mainstream media there was a dramatic spike in searches for terms such as “RU486”, “RU486 safe” and “RU486 medical problems”. Similar trends were visible when bird flu was in the news.

So where did these searches lead Australians? Some to the existing big media – the ABC web site scored ten per cent of the RU486 searches, and The Age 4.5 per cent. But in equal or greater numbers the search engines sent people to the websites of lobby groups and sites run by independent citizens. In all, seventy nine websites received extra hits and only a fraction were those of established media companies.

Hanchard has said that the role of search engines means “Content provision on the internet is anyone’s game – despite the seeming dominance of existing media players.”

But this will only remain true if Google runs its business with integrity – which makes the ACCC action significant for us all. Google has said the ACCC action is without merit and will be defended vigorously.

The matter has been listed for a directions hearing in the Federal Court, Sydney, on 21 August 2007 before Justice Allsop.

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Peter Fray
Peter Fray
Editor-in-chief of Crikey
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