The Australian Competition & Consumer Commission (ACCC) released its Digital Platforms Inquiry preliminary report yesterday, scrutinising Google, Facebook and Australian news and advertising.
The report offers 11 preliminary recommendations and eight areas for further analysis as the inquiry continues in its preliminary report.
According to the ACCC, the commission 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.
Speaking in a media conference on the report shortly after its release, ACCC chairman Rod Sims said while Google and Facebook are “unavoidable business partners for Australian media businesses”, he added, “when you get to a certain stage, there comes extra responsibility and added scrutiny”.
Sims admitted, however, “The business model of Google and Facebook has been stunningly successful and you have to admire this.”
For Sims, the issue with Google and Facebook when it comes to media businesses in Australia is “Digital platforms don’t recognise original content and source in ranking and display of news… this reduces the value for news businesses that invest lots of content.
“The concern about a lack of recognition is one example of issues which have arisen from lack of transparency about how news is ranked.
He added, “Leaving it Google and Facebook’s hands is not enough.”
One stunning revelation Sims revealed in the media conference is the ACCC currently have “five invests underway arising from this report”.
“Some are allegations which could sit under competition law; the misuse of market power, some are consumer law, they’re things we’re looking at but certainly out of this inquiry have come the potential for breaches and we will be investigating ASAP,” Sims added.
Now, following the ACCC’s recommendations and stance that Google and Facebook have hugely, and unfairly disrupted Australian media, the industry is backing the report and applauding the commission.
Speaking on the findings, Seven West Media CEO Tim Worner congratulated the ACCC, noting the report was “first of its kind in the world”.
“We are encouraged by its preliminary findings and initial recommendations… we particularly welcome the ACCC’s recognition of the need to address regulatory imbalance between digital platforms and other Australian content and local media businesses.
“While the Preliminary Report is focussed on news and journalistic content, we note that Google and Facebook also have a massive impact on producers of all Australian content… this won’t be the last time these companies are looked at, and that’s the way it should be.”
Similarly, News Corp Australasia executive chairman Michael Miller thanked the ACCC, adding he was “encouraged” by its concerns.
“The report highlights the impact the digital platforms have as unavoidable business partners and gateways between news media businesses and both consumers and advertisers.
“As global campaigners against the dominance and lack of transparency of the digital platforms, we are encouraged by the ACCC preliminary recommendation that Google and Facebook’s strong market position justifies a greater level of regulatory oversight.”
Meanwhile, Free TV CEO Bridget Fair called the report a “game changer for Australian media businesses as well as Australian consumers”.
“It is the first time an Australian regulator has called out the substantial market power held by Google and Facebook in the areas of online search, digital advertising and access to news content.”
Speaking on the report, NewsMediaWorks CEO Peter Miller said: “There are several recommendations in the preliminary report that go to evening up the playing landscape, for example, the strengthening of requirements around the collection and use of personal information that would be applauded by all.
“This has been a shambles.
“Closer scrutiny of the market power and practices of the platforms can only be a good thing for the originators of authentic and diverse news and journalism which is vital to civic society,” Miller added.
As well as thanking the ACCC, most media execs have explained why the report is so crucial to their particular industry.
Speaking on this, CRA chief executive officer Joan Warner said: “We’re pleased that the ACCC’s preliminary report has found that action is needed to address the gaping inequalities that exist between regulations applying to radio broadcasters and digital platforms.”
“Commercial radio is subject to numerous regulations including, but not limited to, local content, Australian music quotas and advertising restrictions, while online platforms have few or no restrictions.
“For instance, broadcasters will be subject to an election advertising blackout ahead of next year’s federal election, which will result in ad dollars being diverted to digital platforms.”
As well as Warner, an AANA spokesperson said: “We agree with the ACCC that many of the issues are complex and welcome the ACCC’s determination to consult with stakeholders between now and 3 June 2019 and its openness to further analysis and assessment.
“We will discuss the preliminary report with our members and other industry bodies and look forward to engaging with the ACCC between now and June 2019.”
While ShareRoot CEO Noah Abelson-Gertler agreed with the importance of the report, he added there were some areas much more crucial which need to be dealt with as quickly as possible the government, namely transparency.
“The ACCC’s proposition of limiting Chrome and the Google search engine’s reach seems like a bit of an overreach by the government, and instead they should focus on the data transparency efforts.
“If consumers like using Google products, people should be free to continue doing so while Google itself should put into place more transparent business practices for the people they are making money off of (all of us).”
“It is great to see that the ACCC is focusing on changes to Australia’s Privacy Act.
“There are already changes being put into place by the government, but more are needed (and this is not a unique problem to Australia).
“The ACCC’s proposed changes follow inline with the laws put into place with the GDPR, and Australia is among the ten’s of other countries following suit behind the GDPR.”