Online Advertising Probe Looms As Government Issues Response To Digital Platforms Inquiry

The Federal Government has pledged $26.9 million towards a new digital platforms unit in the ACCC and will commence the process of creating a “platform-neutral regulatory framework”.

It comes in response to the ACCC’s Digital Platforms Inquiry, which assessed the impact of the likes of Google and Facebook on Australia’s media industry.

Of the ACCC’s 23 recommendations, the government supports or supports in principle 16.

In a joint media release, Prime Minister Scott Morrison, Treasurer Josh Frydenberg, Attorney-General Christian Porter and Minister for Communications Cyber Safety and the Arts Paul Fletcher laid out their stance.

“Digital technologies are going to be an increasingly important part of our economic and social landscape,” they said.

“The Government wants to get the right regulations in place so Australia can be a leading digital economy.”

what’s changing?

While the outcome of the Digital Platforms Inquiry will eventually be a new media regulatory framework, this appears to still be some time away.

The most immediate response is the establishment of a Digital Platforms Branch within the ACCC, which will receive $27 million over four years to monitor and biannually report on digital platforms.

The new Branch will also have the right to take enforcement action “as necessary” and conduct inquiries as directed.

One of the Branch’s first points of action will be an inquiry into competition for the supply of ad tech services and the supply of online advertising by advertising and media agencies.

Additionally, from 2020 onwards the government will begin crafting the new “platform-neutral”, with an immediate focus on “addressing bargaining power imbalances between digital platforms and news media businesses by asking the ACCC to work with the relevant parties to develop and implement voluntary codes to address these concerns”.

‘Phase One’ will initially focus on developing a uniform classification framework across all media platforms and looking at the purpose of content obligations on FTA broadcasters and whether such regulations should apply to SVOD services.

Following on from this in ‘Phase Two’, there will then be a review of the advertising “rules and restrictions across all delivery platforms”.

This will seek to remove “redundant” legislation and create a new legal framework for consumers and the industry.

There will also be an immediate review of the Privacy Act to ensure the settings “empower consumers, protect their data and best serve the Australian economy”.

The government supports the original recommendation to increase penalties for breaching this act and will introduce a binding social media and online platforms privacy code as part of the 2019–20 Budget.

Industry responds

Following on from the government’s announcement DIGI – the group which represents both Facebook and Google – issued its response.

“DIGI will be examining the Government’s response to the ACCC digital platforms inquiry closely, and we will continue to contribute to the ongoing consultation with the Government and regulatory bodies,” said DIGI managing director Sunita Bose.

“We recognise the importance of the issues raised in relation to maintaining competition in the news and advertising markets, and ensuring consumer privacy is protected online.

“We’ll be studying the proposals in detail to ensure that the consumer protections are fit for a digital era, and that there are no unintended consequences for Australia’s digital future, economic growth and global competitiveness.

“We welcome an economy-wide review of the Privacy Act, as consumers will have the same expectations of privacy, regardless of the specific company they interact with or the sector within which that company sits.”

Facebook managing director ANZ William Easton said: “We share the Government’s view that now is an opportune time for democratic countries like Australia to work with industry on new regulation for the internet that protects the choice and opportunities for millions of Australians that use our services.

“We support a sustainable news ecosystem which is why we work with publishers to help them reach new audiences and invest significantly in tools to provide transparency over the content people and publishers see on our services. Our primary focus remains on achieving economy-wide privacy protection, data portability and a user focused digital news distribution code, while preserving the many benefits that technology delivers in this country.”

A Google Australia spokesperson added: “Australians come to Google for helpful products and services, whether it’s finding answers to questions, getting directions through maps, or businesses connecting with new audiences through advertising. We have engaged closely with the ACCC and the Government throughout this comprehensive process and will continue to do so in 2020, including on focus areas such as privacy, ad tech and our work with publishers.”

Nine CEO Hugh Marks said: “This is a much needed and timely announcement from the Government in response to the recommendations that had been made by the ACCC as part of their digital platforms inquiry. It provides a clear timeline and platform for our industry to be able to engage with the social media platforms on a basis we ultimately believe will be a win win not only for our industry and the people that work in it, but the social platforms as well.

“We congratulate the Prime Minister, Minister Fletcher and the Government on its bold statement and look forward to the next steps in achieving recognition of the value that our content and our journalism means to the social platforms and their audiences.”

Seven West Media managing director and CEO James Warburton added: “Seven is particularly pleased by the announced process to swiftly address out of date Australian content requirements that are currently holding back Australian media businesses.

“We encourage the Government to move quickly to provide certainty to industry and put in place a new framework for content that better reflects commercial realities and the changed viewing patterns of Australian audiences.

“The urgent need for regulatory equality between foreign Digital Platforms and Australian companies has been recognised by the Government. We see this as a real turning point, as for too long legislation has lagged well behind technological evolution, disadvantaging Australian companies and providing foreign Digital Platforms with a free ride.”

“We are disappointed that the Government is not pursuing a mandatory take down scheme for copyright infringing material as recommended by the ACCC. But it is pleasing that the Government has committed to reviewing copyright enforcement mechanisms during 2020.”

Network 10’sCEO Paul Anderson said: “It’s great the Government is making a serious attempt to address the deep-rooted dominance of the online tech and streaming giants.

“On Free to Air content regulation, the issues are clear and the answers are already there. We just have to get cracking and get it done.”