Australia questions power of internet giants
Australia’s competition head is talking up the possibility of trying to rein back the market power of digital giants such as Facebook and Google, saying their impact raised vital questions for ‘‘Australia and the world’’.
The chairman of New Zealand’s Commerce Commission, Dr Mark Berry, declined to discuss his own views on the subject on Wednesday, citing the appeal currently before the courts over its decision not to authorise the merger of publishers NZME and Stuff Ltd.
Australian Competition and Consumer Commission (ACCC) chairman Richard Sims questioned digital platforms’ market power and their impact on privacy and on ‘‘quality news’’ in a conference speech that was widely reported in Australia.
Sims said digital platforms were clear competitors to media companies in the advertising market, but the impact they were having on the diversity of news was not straightforward.
‘‘We will be investigating whether the reduction in advertising revenue prevents publishers and broadcasters from delivering quality journalism – by which we mean investigative, verified and diverse journalism.
‘‘Journalism is a highlyvalued profession and crucial to our lives. Just like we are well advised not to rely on amateur doctors, perhaps we should not rely on amateur journalists.’’
Sims raised his concerns amid signs of a charm offensive by Google on officials and politicians on both sides of the Tasman.
In a possible sign Google may be concerned about regulatory action spreading, Google’s top lawyer, Kent Walker, tacked on a visit to New Zealand to a trip he made to Australia last month.
Walker is understood to have spent 24 hours in the country meeting with officials from Internal Affairs and the Ministry of Business, Innovation and Employment and dining with Justice Minister Andrew Little and Communications Minister Clare Curran.
In December, the Australian government ordered the ACCC to hold an inquiry into the impact of digital platforms on competition in the media and advertising markets.
No such inquiry is under way in New Zealand.
A Commerce Commission spokeswoman said it didn’t have the same ability to undertake public inquiries but noted a law change before Parliament would potentially allow that.
‘‘We are aware of international work in this area and are ensuring that we are informed about developments,’’ she said.
Sims said it was important that governments examined the role digital platforms were playing in society and determined ‘‘if policies are needed to curb their pursuit of profit’’.
Investors were assuming that Google and Facebook were not yet close to reaching the height of their powers, he added.
More than two-thirds of Facebook’s market valuation and about half of Google’s was based on future growth, he said.
‘‘The market’s valuation of Facebook and Google shows that the market believes they will be even stronger in the years ahead. Whatever issues we face today will only grow in importance.’’
Facebook said in a submission to the ACCC inquiry in April that its advertising service had enabled ‘‘a whole new generation of entrepreneurs and small and medium-sized local businesses, many of which could never have previously afforded newspaper or TV ads, to reach a national or even global audience affordably’’.
‘‘Many of our advertisers spend only a small portion of their overall advertising budget with us,’’ it said.
Google said in its submission that online advertising was why it was able to offer most of its services to Australians for free.
Traditional media firms were having to ‘‘rethink their business models’’, but the internet had enabled startups to emerge with ‘‘novel business models for the provision of news’’, it said.