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ACCC targets Facebook and Google

Tuesday, January 08, 2019

In December 2017 the Federal Government formally directed the ACCC to commence an inquiry into digital platform providers such as Facebook and Google.

 

Last month the ACCC released their preliminary report into those companies along with Australian news and advertising entities. The ACCC stated:

 

With Google and Facebook transforming the way consumers communicate, access news and view advertising online, it is critical that governments and regulators consider the potential issues created by the concentration of market power and the broader impacts of digital platforms.”

 

The inquiry has also uncovered some concerns that certain digital platforms have breached competition or consumer laws. The ACCC is currently investigating five such allegations.

While the report is only preliminary, the ACCC has reached the view that Google has substantial market power in online search, search advertising and news referral, and Facebook has substantial market power in markets for social media, display advertising and online news referral.

 

The report outlines 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 monetise their content. The report also outlines concerns regarding the extent to which consumers’ data is collected and used to enable targeted advertising.

 

Put simply, the ACCC is concerned about:

 

  1. how the platforms deliver news-related content to consumers and whether the platforms are deliberately exposing consumers to ‘filtered’ or ‘fake’ news for a profit. Also, the ACCC considers the platforms’ algorithms rank and display advertising and news content in a way that lacks transparency to advertisers and news organisations.
  2.  the vast amount of information collected by Google and Facebook on Australian consumers, which goes well beyond the usual data which users provide when using online platforms;
  3. Lengthy, complex and ambiguous online terms of service and privacy policies, with ‘take-it-or-leave-it’ and ‘subject to automatic change’ terms;
  4. Limited choice in use of service providers given the enormous market share of Google and Facebook.
  5.  

 The ACCC’s Chair Rod Sims stated:

 

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 preliminary report contains 11 recommendations which the ACCC is seeking public feedback on. Some of the recommendations include a specific code of practice for digital platforms, establishing an investigatory body for reviewing platforms ranking and display of news content to consumers, strengthening merger laws and recommendations dealing with copyright and take-down orders.

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