Digital giants to face data checks
Facebook, Google, Apple and other digital giants will be forced to explain how they use the data of consumers for highly personalised advertising under an 18month inquiry by the competition watchdog.
Josh Frydenberg has directed the Australian Competition & Consumer Commission to shine a light on how internet information is shared with advertisers, and whether the ads are providing value for money for businesses.
Digital giants will be compelled to hand over ad revenue data and the amount charged to businesses to promote products on their platforms.
The inquiry’s terms of reference also give ACCC chairman Rod Sims the power to assess how the market power of digital firms affect the supply of ad opportunities for businesses.
The Treasurer has also tasked the ACCC with a five-year inquiry into digital platforms to scrutinise anti-competitive behaviour. The watchdog will provide its first report on September 30 and every six months after.
The two probes are part of the Morrison government’s response to the ACCC’s initial digital platforms inquiry handed down last year.
Mr Frydenberg said regulatory frameworks needed to keep pace with the changes of media consumption driven by the internet.
“The government recognises that there is a need for reform to better protect consumers, improve transparency, address power imbalances and ensure that substantial market power is not used to lessen competition in media and advertising services markets,” he said.
“With digital platforms collecting and using enormous volumes of personal information, consumers need to be properly informed about the data collected, how it is being used and by who.”
Facebook, Google and other tech giants have been subject to several antitrust investigations in Europe and the US as a result of their behaviour in the market, particularly in relation to ads and treatment of competitors.
The companies have also been fined tens of billions of dollars over breaches of privacy and competition law.
US federal regulators this week said they were investigating the tech giants over how they bought smaller rivals and whether they harmed competition, hurt consumers and evaded regulatory scrutiny. The US Federal Trade Commission ordered Facebook, Google, Amazon, Apple and Microsoft to provide details as to how their firms dealt with and bought junior rivals over the past decade.
The two latest inquiries launched by Mr Frydenberg were recommended under the initial probe from Mr Sims, who said there were many “adverse effects” on the media market because of Google and Facebook.
Mr Sims warned that the tech giants were distorting the ability of businesses to compete on their
merits in advertising, media and a range of other markets.
He also identified problems with opaque digital ad markets, consumers not being adequately informed about how their data was collected and used, and the rise of “fake news” being shared by the tech giants.
The ad-tech inquiry will be finalised by August next year, with an interim report to be released by the end of this year.
The probes will be undertaken by the ACCC’s new digital platforms branch, which was provided with $26.9m in funding in December.
The findings from the inquiries will build on reforms unveiled by the Morrison government in December, which included a voluntary code of conduct requiring digital giants to pay media companies for content.
If a digital platforms code of conduct cannot be finalised by November the government would step in to introduce a mandated scheme.