ACCC report into digital platforms paints disturbing picture of their media and advertising dominance

Australian watchdog calls for a host of regulatory and market changes in a bid to curb the power of Google and Facebook and confirms five allegations of anti-competitive behaviour are being investigated

The Australian Competition and Consumer Commission (ACCC) has called for more regulatory authority to investigate, monitor and report on how Facebook and Google are dominating news content and advertising services as well as capturing data about consumers in the digital age.

The recommendations are among 11 made as part of the watchdog’s new preliminary report into Google, Facebook and Australian news and advertising released today. The inquiry into the alarming power of digital platforms, search and social media giants on the media and advertising services ecosystem was initially announced last December.

The preliminary report paints a worrying picture of how the two players are transforming Australian news and advertising, with the ACCC outlining significant issues with the market power held by such digital platforms.

Off the back of this, the authority has put together a wide-ranging list of recommendations to lift transparency and regulate the way digital platform players operate, from a new digital ombudsman to browser and search engine choices, advertising and news regulatory oversight, take-down standards, personal information amendments, codes of practice and privacy reforms.

The ACCC has also confirmed it’s investigating digital platforms for five potential breaches of competition and consumer laws identified as part of the inquiry.

On the competition front, for example, the ACCC noted Google and Facebook have become the dominant gateways between news media businesses and audiences. This has led to growing inability of media businesses monetise their content through advertising, decimated journalism locally, and reduced brand value and recognition of media businesses, the ACCC stated.

In addition, the watchdog warned consumers are in significant danger of winding up in a news filter bubble or ‘echo chamber’ given the range and reliability of news made available to them via Google and Facebook. Today, more than 50 per cent of traffic on Australian news media websites comes from Google and Facebook.

The ACCC also expressed hefty concerns with the amount and variety of data being collected on Australian consumers, which goes beyond the data actively being provided when using such digital platform services. As well as noting consumer concerns about these data collection practices, the ACCC specifically highlighted the length, complexity and ambiguity of online terms of service and privacy policies, including ‘click-wrap’ agreements with ‘take-it-or-leave-it’ terms.

The extent to which Google and Facebook favour their own interests and can reward businesses maintaining existing commercial relationships with their platforms was another area of alarm for the ACCC. In particular, the report pointed out algorithms ranking and displaying advertising and news content lacked transparency to advertisers and news organisations.

While some positive changes have been realised as a result of digital platforms, ACCC chair, Rod Sims, said these platforms are also “unavoidable” business partners for many Australian businesses, raising significant competition issues as a result.

“Organisations like Google and Facebook are more than mere distributors or pure intermediaries in the supply of news in Australia; they increasingly perform similar functions as media businesses like selecting, curating and ranking content. Yet digital platforms face less regulation than many media businesses,” Sims stated.

“The ACCC considers that the strong market position of digital platforms like Google and Facebook justifies a greater level of regulatory oversight.

“Australian law does not prohibit a business for possessing significant market power of using its efficiencies or skills to ‘out compete’ its rivals. But when their dominant market position is at risk of creating competitive or consumer harm, governments should stay ahead of the game and act to protect consumers and businesses through regulation.”

To curb their power, the ACCC is recommending new or existing regulatory authority be given the task of investigating, monitoring and reporting on how large digital platforms rank and display advertisements and news content.

A big item on the list is a digital platforms ombudsman to investigate complaints and resolve disputes, as well as criteria, commercial arrangements and other factors being used to rank, display and potentially discriminate via advertising and news content rankings. The ACCC has suggested the regulatory scrutiny come in on organisations earning more than $100 million per annum from digital advertising in Australia.

It’s also recommended a review of media regulatory frameworks, mandatory ‘take-down’ standards for copyright infringement, as well as processes that allow consumers to opt out of targeted advertising and even delete their own user data. Further, there's strengthened notification and consent requirements, a third-party certification scheme and increased penalties for data breaches.

In addition, the ACCC is pushing to stop Google’s Chrome Internet browser from being installed as a default on mobile devices, computers and tablets, as well as Google’s search engine being installed as a default search engine on Internet browsers.

Proposed areas for further assessment include a digital platforms ‘badge’ for media content produced by an accountable media business, options to fund the production of news and journalism, such as tax deductions or subsidies, and deletion of user data. 

Since calling for submissions in February, more than 60 companies and individuals from across the media industry have submitted their views to the digital platforms inquiry.

The ACCC has opened up the recommendations and eight proposed areas for analysis and assessment for feedback from now until 15 February 2019. The final report is due in front of the Government by 3 June 2019.

Follow CMO on Twitter: @CMOAustralia, take part in the CMO conversation on LinkedIn: CMO ANZ, join us on Facebook: https://www.facebook.com/CMOAustralia, or check us out on Google+:google.com/+CmoAu     

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