According to ACCC chair Rod Sims, the Commission’s recommendations deal with the many competition, consumer, privacy and news media issues the watchdog has identified throughout the course of its inquiry. ACCC’s recommendations are also “dynamic”, in that they will provide the framework and the information that governments and communities will need to address further issues as they arise.
Dominance of Google and Facebook
During the course of its inquiry, the ACCC identified adverse effects associated with digital platforms, many of which flow from the dominance of Google and Facebook. The ACCC found that the market power of Google and Facebook has distorted the ability of businesses to compete on their merits in advertising, media and a range of other markets. The digital advertising markets are opaque with highly uncertain money flows, particularly for automated and programmatic advertising.
The ACCC’s investigation also found that customers are inadequately informed about how their data is collected and used and have little control over the huge range of data collected. News content creators are reliant on the dominant digital platforms, yet face difficulties in monetising their content, while the Australian society has been impacted by disinformation and a rising mistrust of news.
Media industry code
The ACCC has made a series of recommendations to address the digital platforms’ impact on Australian media businesses and how Australians access news. These include requiring designated digital platforms to each provide the Australian Communications and Media Authority (ACMA) with codes to address the imbalance in the bargaining relationship between these platforms and news media businesses and recognise the need for value sharing and monetisation of content; addressing the regulatory imbalance that exists between news media businesses and digital platforms, by harmonizing the media regulatory framework.
The ACCC also recommends targeted grants to support local journalism of about AUD 50 million per year; the introduction of measures to encourage philanthropic funding of public interest journalism in Australia. The Commission also believes that ACMA should monitor the digital platforms’ efforts to identify reliable and trustworthy news. The ACCC also believes that digital platforms should draft and implement an industry code for handling complaints about deliberately misleading and harmful news stories. The recommendations also cover the introduction of a mandatory take-down ACMA code to assist copyright enforcement on digital platforms.
Start-ups competition, merger controls
ACMA’s report also shows that the acquisition of startups by large digital platforms has the potential to remove future competitive threats. Acquisitions may also increase the platforms’ access to data. Both situations may further entrench a platform’s market power. The ACCC recommends changes to Australia’s merger laws to expressly require consideration of the effect of potential competition and to recognise the importance of data.
The ACCC also recommends that large digital platforms agree to a notification protocol that would alert the ACCC to proposed acquisitions that may impact competition in Australia. The report also calls on Google to allow Australian users of Android devices (new and existing) to choose their search engine and internet browser from a number of options, as proposed in Europe, rather than being provided with defaults. The ACCC also recommends introducing a general prohibition on unfair commercial practices. The ACCC has also again recommended unfair contract terms should be prohibited and should attract civil pecuniary penalties, and not just be voidable as they are now. The ACCC also supports the introduction of a mandatory standard to boost a digital platforms’ internal dispute resolution processes and that an ombudsman scheme be established, to assist with resolving disputes and complaints between consumers and digital platform providers.
Stronger privacy law
In light of the overlapping nature of privacy, competition and consumer protection issues in digital markets, the ACCC has made a range of privacy-related recommendations, including strengthening protections in the Privacy Act; broader reform of the Australian privacy law framework; the introduction of a privacy code of practice specifically for digital platforms; as well as the introduction of a statutory tort for serious invasions of privacy.
The inquiry found that digital platforms’ privacy policies are long, complex, vague and difficult to navigate and that many digital platforms do not provide consumers with meaningful control over the collection, use and disclosure of user data. Problematic data practices include the use of click-wrap agreements and take it or leave it terms. The ACCC thus believes that recommended amendments to the Privacy Act should be supplemented by an enforceable privacy code of practice, developed by the Office of the Australian Information Commissioner (OAIC), and address data practices specific to digital platforms.
The ACCC recommends the 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 our consumer laws, and to undertake rolling market studies.
One of the first tasks of the new branch should be to conduct an inquiry into the supply of ad-tech services and the supply of online advertising services by advertising and media agencies. The inquiry would identify whether any competition or efficiency concerns exist and help achieve greater transparency in the supply of these services.
The ACCC recommends future law enforcement and regulation of digital platforms be dealt with by the current regulators including the ACMA, the OAIC and the ACCC.
ACMA backing
The Australian Communications and Media Authority (ACMA) has applauded the ACCC’s comprehensive review of the impact of digital platforms on Australian news media, advertisers and consumers. The ACMA’s current role includes regulation of significant areas of media content, including in relation to news, classification and gambling. To that end, the ACMA is particularly interested in the ACCC’s recommendations aimed at addressing regulatory disparity between news media businesses and digital platforms; supporting and enhancing the choice and quality of journalism; improving the balance of bargaining power between digital platforms and media businesses; and ensuring digital platforms have robust codes and dispute resolution processes.
The ACMA says it will review the report in detail and stand ready to participate and contribute to the Government’s public consultation process and consideration of the recommendations.
