The ACCC is investigating whether or not tech giants have breached Australian consumer and competition law as part of its digital platforms inquiry.

The consumer watchdog released a preliminary report this morning, 12 months after being directed by the federal government to conduct a public inquiry into the impact of digital platforms on competition in media and advertising.

So far the ACCC has determined Facebook and Google both have significant market power and raised concerns over the negative impacts of the platforms.

The preliminary report contains 11 recommendations and nine areas for further analysis, which are aimed at contributing to the discussion around the appropriate level of government oversight. 

Outside the recommendations made in the report, ACCC Chairman Rod Sims said the inquiry had identified five potential breaches of competition or consumer laws that the watchdog is now investigating to determine if further enforcement is required.

“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,” he said.

Key Concerns

The ACCC found Google has substantial market power in online search, search advertising and news referral, while Facebook has substantial market power in markets for social media, display advertising and online news referral.

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

Rod Sims, chairman, ACCC

“Australian law does not prohibit a business from possessing significant market power or using its efficiencies or skills to ‘out compete’ its rivals. But when their dominant 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.”

The concerns raised by the ACCC ranged from the large amount and variety of data which the likes of Google and Facebook collect on Australian consumers, the length and complexity of their privacy policies and the opacity of algorithms which rank content.

The ACCC’s preliminary view is that consumers face a potential risk of filter bubbles, or echo chambers, and less reliable news on digital platforms.

Recommendations

One recommendation is to prevent Google’s internet browser (Chrome) being installed as a default browser on mobile devices, computers and tablets and Google’s search engine being installed as a default search engine on internet browsers.

Another recommendation is to strengthen merger laws, including asking the likes of Google and Facebook 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.

The ACCC also proposes a 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.

Additional preliminary recommendations deal with copyright, and take-down orders, and the review of existing, disparate media regulations.

The ACCC is further considering a recommendation for a specific code of practice for digital platforms’ data collection to better inform consumers and improve their bargaining power.

The report also recommends amendments to the privacy act to give consumers greater control over the collection of personal information, including strengthening consent requirements and requiring businesses to delete personal information if consumers ask, accompanied by tougher penalties for breaches (G’day, GDPR).

The ACCC also provided a list of areas which it believes requires further analysis and assessment

  1. Supporting choice and quality of journalism
  2. Improve news literacy online
  3. Improving the ability of news media to fund the production of news and journalism
  4. A digital platform Ombudsman
  5. Monitoring intermediary pricing
  6. Third party measurement of advertisements served on digital platforms
  7. Deletion of user data
  8. Opt-in targeted advertising
  9. Prohibition against unfair practices

The ACCC is seeking feedback on its preliminary recommendations, and the eight proposed areas for further analysis and assessment. A final report will be provided to the government by 3 June 2019.

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