ACCC: Digital takeovers may harm consumers

Consumer watchdog still has digital platforms in its sights after its recent inquiry, with market dominance under scrutiny

The takeover of smaller rivals by large digital platforms, which includes swagging their customer data sets, poses a threat to consumers’ choice and privacy, according to Australian Competition and Consumer Commission (ACCC) chair, Rod Sims.

Speaking at the Consumer Policy Research Conference, Sims said few consumers are fully informed of, nor can they effectively control, how their data is going to be used and shared. 

“There are further concerns when the service they sign up to is taken over by another business,” he said.

Sims singled out Google and Facebook, whose market dominance has been scrutinised by the consumer body in its Digital Platforms Inquiry. These new concerns were raised in relation to Google’s recently announced proposed acquisition of Fitbit.

“The change in data collection policies, when a company like Fitbit transfers its data to Google, creates a very uncertain world for consumers who shared very personal information about their health to Fitbit under a certain set of privacy terms,” said Mr Sims.

Citing other examples, such as Google’s acquisition of DoubleClick, which saw the search giant update its privacy policy years later and remove a commitment not to combine DoubleClick data with personally identifiable data held by Google.

In another case, when Facebook acquired WhatsApp, the social media platform claimed it was unable to establish reliable matching between Facebook users’ and WhatsApp users’ accounts. Yet two years later, WhatsApp updated its terms of service and privacy policy, indicating it could link WhatsApp users’ phone numbers with Facebook users’ identities.

“Given the history of digital platforms making statements as to what they intend to do with data and what they actually do down the track, it is a stretch to believe any commitment Google makes in relation Fitbit users’ data will still be in place five years from now,” said Sims.

The all-encompassing dominance of the two platforms when it comes to digital services can’t be underestimated, with Sims saying the Digital Platforms Inquiry showed for business users and advertisers, Google and Facebook are essentially the gatekeepers to consumers in Australia. 

Not only do they collect data from consumers spending time on their own websites and apps, which accounts for over 39 per cent of Australians’ time spent online, they have the largest network of trackers on third-party websites and apps, Sims explained.

According to the ACCC, a study of the top 1 million websites found a Google tracker on more than 70 per cent of websites and a Facebook tracker on over 20 per cent. Research of the top 1 million apps on the Google Play store found that 88 per cent of the apps were sending data to Google and 43 per cent of the apps were sending data to Facebook. Virtually every keystroke registers a hit in their data bank and reinforces their market power.

However, while their market dominance gives them access to unparalleled amounts of private and public data, it’s precisely this which risks eroding consumer trust because of the lack of transparency about data usage policies.

The ACCC says its inquiry showed around 80 per cent of users considered digital platforms tracking their online behaviour to create profiles, and also the sharing their personal information with an unknown third party, a misuse of their information.

“Vague, long and complex data policies contribute to this substantial disconnect between how consumers think their data should be treated and how it is actually treated.

“Transparency and inadequate disclosure issues involving digital platforms and consumer data were a major focus of our Inquiry, and remain one of the ACCC’s top priorities.”

Since the inquiry, Sims said it continues to take action on these issues and that consumer regulators worldwide are taking up cases against certain digital platforms in relation to market dominance, privacy policies, and data usage practices. Locally, the Australian government is expected to release its response to the ACCC inquiry and while the regulator is seeing some positive changes from the platforms, it remains a significant challenge. 

“We are concerned that protections for consumers need to match the new digital age as the existing regulatory frameworks for the collection and use of data has not held up well to the challenges of digitalisation.”

Follow CMO on Twitter: @CMOAustralia, take part in the CMO conversation on LinkedIn: CMO ANZ, follow our regular updates via CMO Australia's Linkedin company page, or join us on Facebook: https://www.facebook.com/CMOAustralia.  

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.
Show Comments

Latest Videos

More Videos

More Brand Posts

What are Chris Riddell's qualifications to talk about technology? What are the awards that Chris Riddell has won? I cannot seem to find ...

Tareq

Digital disruption isn’t disruption anymore: Why it’s time to refocus your business

Read more

Enterprisetalk

Mark

CMO's top 10 martech stories for the week - 9 June

Read more

Great e-commerce article!

Vadim Frost

CMO’s State of CX Leadership 2022 report finds the CX striving to align to business outcomes

Read more

Are you searching something related to Lottery and Lottery App then Agnito Technologies can be a help for you Agnito comes out as a true ...

jackson13

The Lottery Office CEO details journey into next-gen cross-channel campaign orchestration

Read more

Thorough testing and quality assurance are required for a bug-free Lottery Platform. I'm looking forward to dependability.

Ella Hall

The Lottery Office CEO details journey into next-gen cross-channel campaign orchestration

Read more

Blog Posts

Marketing prowess versus the enigma of the metaverse

Flash back to the classic film, Willy Wonka and the Chocolate Factory. Television-obsessed Mike insists on becoming the first person to be ‘sent by Wonkavision’, dematerialising on one end, pixel by pixel, and materialising in another space. His cinematic dreams are realised thanks to rash decisions as he is shrunken down to fit the digital universe, followed by a trip to the taffy puller to return to normal size.

Liz Miller

VP, Constellation Research

Why Excellent Leadership Begins with Vertical Growth

Why is it there is no shortage of leadership development materials, yet outstanding leadership is so rare? Despite having access to so many leadership principles, tools, systems and processes, why is it so hard to develop and improve as a leader?

Michael Bunting

Author, leadership expert

More than money talks in sports sponsorship

As a nation united by sport, brands are beginning to learn money alone won’t talk without aligned values and action. If recent events with major leagues and their players have shown us anything, it’s the next generation of athletes are standing by what they believe in – and they won’t let their values be superseded by money.

Simone Waugh

Managing Director, Publicis Queensland

Sign in