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Australian anti-trust watchdog challenges market dominance of Google and Facebook in advertising and online news

The Australian Competition and Consumer Commission (ACCC) submitted its report on Digital Platforms Inquiry earlier today in which it recommended limiting the market dominance of Facebook and Google to promote competition, strengthening the Australian Privacy Act, and giving Australians greater power over how their information is collected and used, amongst 23 recommendations. If implemented, these steps will set a global precedent for checking Big Tech’s global oligopoly over advertising and online news.

The Australian Treasurer Josh Frydenberg said that the government intended to “lift the veil” on the closely guarded algorithms the firms use to collect and monetise users’ data, and accepted the ACCC’s “overrising conclusion that there is a need for reform”, Reuters reported. Drawing attention to Facebook and Google’s market dominance, he said that the two companies accounted for 61 per cent of online advertising revenue between them, despite sourcing their content from media organisations, ABC reported.

To no one’s surprise, Google and Facebook have opposed tighter regulation and said that ACCC had underestimated the level of competition for online advertising. Traditional media owners have backed the reform, as per Reuters.

This inquiry was directed by the then Treasurer Scott Morrison on December 4, 2017. It looked into the effect of search engines, social media platforms and digital content aggregation platforms on competition in media and advertising. The preliminary report was released on December 10, 2018. ACCC is the Australian anti-trust watchdog. The proposals will be subjected to a 12-week public consultation before the government acts on the report at the end of the year, ABC reported.

Australia is investigating Google and Facebook

According to Reuters, ACCC Chairman Rod Sims said that five different investigations of Google and Facebook were under way, and more could follow. ACCC’s report said that it expects to conclude these investigations later in the year.

Adverse effects of digital platforms

Most adverse effects stem from dominance of Google and Facebook in the market, according to the report:

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  • Google and Facebook’s market power distorted businesses’ ability to compete in advertising, media, and other markets
  • Digital advertising markets are opaque with highly uncertain money flows
  • Consumers not adequately informed about how their data is collected and used; have little control over the data collected
  • News content creators reliant on dominant digital platforms, but unable to monetise their content
  • Australian society, like others in the world, affected by disinformation and increasing mistrust of news

Recommendations

23 recommendations were made:

  1. Changes to Australia’s merger laws to require consideration of the effect of potential competition and to recognise the importance of data
  2. Advance notice of acquisitions that would alert the ACCC to proposed acquisitions by large digital platforms that may impact competition in Australia
  3. Google should allow Australian Android users to choose their search engine and internet browser, as in Europe, instead of providing them with defaults
  4. Government establish a specialist digital platforms branch within the ACCC, with standing information-gathering powers, to proactively monitor and investigate potentially anti-competitive conduct by digital platforms and conduct that may breach Australian consumer laws, and to undertake rolling market studies
  5. Inquiry into ad tech services and advertising agencies by the specialist digital platform branch recommended earlier
  6. Process to implement harmonised media regulatory framework for consistent regulatory oversight of all entities involved in content production/delivery
  7. Designated digital platforms to provide the Australian Communications and Media Authority (ACMA) with codes of conduct to govern their relationships with news media businesses
  8. Mandatory take-down ACMA code to assist copyright enforcement on digital platforms
  9. Stable and adequate funding for public broadcasters
  10. Targeted grants to support local journalism of about AU$50 million a year
  11. Tax benefits to encourage philanthropic support for journalism
  12. Improve digital media literacy in the community
  13. Digital media literacy in schools
  14. Monitor the digital platforms’ efforts to identify reliable and trustworthy news via an independent regulator such as the ACMA
  15. Digital Platforms Code to counter disinformation
  16. Strengthen protections in the Privacy Act
  17. Broader reform of the Australian privacy law framework
  18. OAIC privacy code for digital platforms
  19. Statutory tort for serious invasions of privacy
  20. Prohibition against unfair contract terms
  21. Prohibition of certain unfair trading practices
  22. Digital platforms to comply with internal dispute resolution requirements
  23. Establish an ombudsman scheme to assist with resolving disputes and complaints between consumers and digital platform providers

MediaNama’s mission is to help build a digital ecosystem which is open, fair, global and competitive.

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