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The Australian competition and consumer commission (ACCC) have today published a 378-page preliminary report to make the Australian government and the public aware of the impact of social media and digital platforms on targeted advertising and user data collection.
The report also highlights the ACCC’s concerns regarding the “market power held by these key platforms, including their impact on Australian businesses and, in particular, on the ability of media businesses to monetize their content.

This report was published following an investigation when ACCC Treasurer Scott Morrison MP had asked the ACCC, late last year, to hold an inquiry into how online search engines, social media, and digital platforms impact media and advertising services markets. The inquiry demanded answers on the range and reliability of news available via Google and Facebook. The ACCC also expressed concerns on the large amount and variety of data which Google and Facebook collect on Australian consumers, which users are not actively willing to provide.

Why did ACCC choose Google and Facebook?

Google and Facebook are the two largest digital platforms in Australia and are the most visited websites in Australia. Google and Facebook also have similar business models, as they both rely on consumer attention and data to sell advertising opportunities and also have substantial market power. Per the report, each month, approximately 19 million Australians use Google Search, 17 million access Facebook, 17 million watch YouTube (which is owned by Google) and 11 million access Instagram (which is owned by Facebook). This widespread and frequent use of Google and Facebook means that these platforms occupy a key position for businesses looking to reach Australian consumers, including advertisers and news media businesses.

Recommendations made by the ACCC

The report contains 11 preliminary recommendations to these digital platforms and eight areas for further analysis. Per the report:

#1 The ACCC wants to amend the merger law to make it clearer that the following are relevant factors:

  • the likelihood that an acquisition would result in the removal of a potential competitor, and
  • the amount and nature of data which the acquirer would likely have access to as a result of the acquisition.

#2 ACCC wants Facebook and Google to provide advance notice of the acquisition of any business with activities in Australia and to provide sufficient time to enable a thorough review of the likely competitive effects of the proposed acquisition.

#3 ACCC wants suppliers of operating systems for mobile devices, computers, and tablets to provide consumers with options for internet browsers and search engines (rather than providing a default).

#4 The ACCC wants a regulatory authority to monitor, investigate and report on whether digital platforms are engaging in discriminatory conduct by favoring their own business interests above those of advertisers or potentially competing businesses.

#5 The regulatory authority should also monitor, investigate and report on the
ranking of news and journalistic content by digital platforms and the provision of referral services to news media businesses.

#6 The ACCC wants the government to conduct a separate, independent review to design a regulatory framework to regulate the conduct of all news and journalistic content entities in Australia. This framework should focus on underlying principles, the extent of regulation, content rules, and enforcement.

#7 Per ACCC, the ACMA (Australian Communications and Media Authority) should adopt a mandatory standard regarding take-down procedures for copyright infringing content.

#8 ACCC proposes amendments to the Privacy Act. These include:

  • Strengthen notification requirements
  • Introduce an independent third-party certification scheme
  • Strengthen consent requirements
  • Enable the erasure of personal information
  • Increase the penalties for breach of the Privacy Act
  • Introduce direct rights of action for individuals
  • Expand resourcing for the OAIC (Office of the Australian Information Commissioner) to support further enforcement activities

#9 The ACCC wants OAIC to develop a code of practice under Part IIIB of the Privacy Act to provide Australians with greater transparency and control over how their personal information is collected, used and disclosed by digital platforms.

#10 Per ACCC, the Australian government should adopt the Australian Law Reform
Commission’s recommendation to introduce a statutory cause of action for serious invasions of privacy.

#11 Per the ACCC, unfair contract terms should be illegal (not just voidable) under the Australian Consumer Law

The inquiry has also uncovered some concerns that certain digital platforms have breached competition or consumer laws, and the ACCC is currently investigating five such allegations to determine if enforcement action is warranted,” ACCC Chair Rod Sims said.

The ACCC is also seeking feedback on its preliminary recommendations and the eight proposed areas for further analysis and assessment. Feedback can be shared by email to [email protected] by 15 February 2019.

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