(Reuters) - Australia's competition watchdog said there was a need to revisit efforts to ensure greater choice for internet users, citing Google's dominant search engine market share and its competitors' failure to capitalise on the artificial intelligence boom.

A report by the Australian Competition and Consumer Commission said that while the integration of generative AI tools into search engines is still nascent, Big Tech's deep pockets and dominant presence give it an upper hand.

The commission said it was concerned Google and Microsoft could integrate generative AI into their search offerings, including through commercial deals, which raises concerns about the accuracy and reliability of search queries.

"While some consumers may find the generative AI search experience more useful and efficient, others may be concerned about the accuracy and reliability of AI-generated responses to search queries," Commissioner Peter Crone said.

Google and Microsoft did not immediately respond to Reuters requests for comment.

Australia has intensified the spotlight on the tech giants, which are mostly domiciled in the U.S. It was the first country to make social media platforms pay media outlets royalties for sharing their content.

Last month, it passed a law that banned social media for children aged under 16, and proposed a law earlier this week that could impose fines of up to A$50 million ($32.28 million) on tech giants if they suppress competition and prevent consumers from switching between services.

The Australian watchdog on Wednesday urged the use of service-specific codes that help prevent anti-competitive behaviour, address data advantages and allow consumers to switch between services freely.

These proposed measures have been agreed to in principle by the government, ACCC said, and it will close its enquiry by next March.

($1 = 1.5492 Australian dollars)