Tech giants on notice
ACCC focus on Google, Facebook
CHARIS CHANG AND NICK WHIGHAM GOOGLE and Facebook are transforming the way people communicate, access news and view advertising – and they are at risk of growing too powerful, according to Australia’s consumer watchdog.
The Australian Competition and Consumer Commission (ACCC) has indicated the need for potential new regulations to stop major tech companies from abusing their power to the detriment of Australia’s media and digital advertising industries.
In a preliminary report, it put forth 11 recommendations to improve oversight of the tech giants and prevent them from engaging in potentially discriminatory conduct.
The watchdog has recommended that 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.
The ACCC says there is a lack of transparency around the algorithms used to rank and display ads and news content, which gives Google and Facebook the ability and incentive to favour related businesses or businesses they have an existing commercial relationship with.
It also includes a proposal, albeit an unlikely one to achieve, that would stop Google’s internet Chrome browser being installed as a default internet browser on mobile devices, computers and tablets; POWER STRUGGLE: ACCC chairman Rod Sims warns Google and Facebook are becoming too powerful. and Google’s search engine being installed as a default search engine on internet browsers.
The ACCC believes the dominance of platforms like Google and Facebook justifies a greater level of regulatory oversight.
“Australian law does not prohibit a business from possessing significant market power or using its efficiencies or skills to ‘out compete’ its rivals,” ACCC chairman Rod Sims said.
“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 decline of traditional media has seen digital platforms grow exponentially in the past decade.
Digital advertising has increased substantially in Australia in recent years, rising from less than $1 billion in 2005 to almost $8 billion in 2017.
Google and Facebook – who derive a vast majority of their revenue from advertising – have captured 80 per cent of that growth in the Australian market.
The ACCC’s inquiry, which was prompted by former Senator Nick Xenophon, comes at the behest of news outlets and digital advertisers who have seen their industry heavily disrupted.
The inquiry is looking at the broader social implications of the rise of digital platforms, such as issues of algorithm-driven news distribution and fake news.
Other important issues being looked at include consumer awareness about the extensive amount of personal information collected by the likes of Google and Facebook, as well as consumer concerns regarding the privacy of their data.
The ACCC’s preliminary view is consumers are at risk of getting less reliable news from these digital platforms and to only see this news through filter bubbles or echo chambers.
The ACCC is seeking feedback on its preliminary recommendations, and the eight proposed areas for further analysis and assessment.
Further stakeholder forums may be held in early 2019.
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