Published: Wed, December 12, 2018
Business | By Eloise Houston

Australia challenges Google, Facebook market power, calls for increased consumer choice

Australia challenges Google, Facebook market power, calls for increased consumer choice

Australia's antitrust regulator, the Australian Competition and Consumer Commission (ACCC), has announced its plans to develop an ombudsman to monitor the influence of Facebook and Google within news and advertising in Australia.

Facebook and Google, in separate statements, both said they will continue to work with the ACCC while the regulator prepares its final report due in June.

The ACCC also called for feedback on the recommendations and the proposed areas for further analysis.

Launching the ACCC report into digital platforms yesterday, he said "quite a lot" of formal investigations had flowed from the ACCC review of their market power.

As the commission points out, Google has substantial market power in online search, search advertising and news referral while Facebook has substantial market power in social media, display advertising and online news referral.

The ACCC believes the dominance of platforms like Google and Facebook justifies a greater level of regulatory oversight.

The recommendation, in a preliminary report on the USA firms' market power, is being closely watched around the world as lawmakers wrestle with the powerful tech firms' large and growing influence in public life, from privacy to publishing.

In particular, it looks at the ability of media businesses to monetise their content and the extent to which consumers' data is collected and used to target advertising. "Google and Facebook are critical and, in many cases, unavoidable business partners".

The ACCC also proposes 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.

According to the NSW Business Chamber's survey of its members, 71 per cent had utilised digital platforms to advertise and indicated digital advertising had positively affected their business, with 62 per cent of respondents indicating digital advertising had increased customers, 43 per cent indicating it had increased sales and 34 per cent indicating it helped reduce costs.

A lack of transparency in key algorithms makes it hard to know if the tech giants are favoring their own business interests over advertisers using the platforms, the ACCC said.

"In the preliminary report that we've released today we've formed the view that the digital platforms have got market power; we've formed the view in addition that they have significantly disrupted media and journalism and their business models".

The ACCC is also considering whether making personal subscriptions to some news publications tax deductible to "encourage production and consumption of news and journalism" would be a useful change, and flagged possible changes to the way digital platforms inform consumers about privacy policies. "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", Sims added.

The digital platforms act as "gateways" to media sites through services such as Google's search engine.

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