Modern technology gives us many things.

ACCC puts Facebook and Google under the microscope and calls for urgent reforms

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The ACCC has released a comprehensive report that will suggest tech giants Google and Facebook must offer more transparency when it comes to anti-competitive behaviour and privacy.

The Australian Competition and Consumer Commission has released a report addressing these leading digital platforms and their impact on Australians, the media and the economy.

The report contains 23 recommendations covering areas like competition law, consumer protection, media regulation and privacy law which must come under a new level of regulation on the back of the rapid growth of these digital platforms.

“Our recommendations are comprehensive and forward looking and deal with the many competition, consumer, privacy and news media issues we have identified throughout the course of this Inquiry,” ACCC Chair Rod Sims said.

“Importantly, our recommendations are dynamic in that they will provide the framework and the information that governments and communities will need to address further issues as they arise.

“Our goal is to assist the community in staying up to date with these issues and futureproofing our enforcement, regulatory and legal frameworks.”

During its enquiry, the ACCC examined several adverse effects linked with the digital platforms.

The greatest concerns come from the dominance of Google and Facebook.

Here is what the ACCC found:

– The market power of Google and Facebook has distorted the ability of businesses to compete on their merits in advertising, media and a range of other markets

– The digital advertising markets are opaque with highly uncertain money flows, particularly for automated and programmatic advertising

– Consumers are not adequately informed about how their data is collected and used and have little control over the huge range of data collected

– News content creators are reliant on the dominant digital platforms, yet face difficulties in monetising their content

– Australian society, like others around the world, has been impacted by disinformation and a rising mistrust of news.

“The dominant digital platforms’ response to the issues we have raised might best be described as ‘trust us’,” Mr Sims said.

“There is nothing wrong with being highly focused on revenue growth and providing increasing value to shareholders; indeed it can be admired.

“But we believe the issues we have uncovered during this Inquiry are too important to be left to the companies themselves.”

“Action on consumer law and privacy issues, as well as on competition law and policy, will all be vital in dealing with the problems associated with digital platforms’ market power and the accumulation of consumers’ data.”

The ACCC has come up with a series of recommendations which will address the impact of these digital platforms on Australian media businesses as well as how Australians access news.

These include:

– Requiring designated digital platforms to each provide the Australian Communications and Media Authority (ACMA) with codes to address the imbalance in the bargaining relationship between these platforms and news media businesses and recognise the need for value sharing and monetisation of content

– Addressing the regulatory imbalance that exists between news media businesses and digital platforms, by harmonizing the media regulatory framework

– Targeted grants to support local journalism of about AU$50 million a year

– Introducing measures to encourage philanthropic funding of public interest journalism in Australia

– ACMA monitoring the digital platforms’ efforts to identify reliable and trustworthy news

– Requiring the digital platforms to draft and implement an industry code for handling complaints about deliberately misleading and harmful news stories

– Introducing a mandatory take-down ACMA code to assist copyright enforcement on digital platforms.

The enquiry has also noted that larger platforms swallowing up start-ups has the potential to remove future competitive threats.

These acquisitions also increase the platforms’ access to data which may further enhance that particular platform’s market power.

The ACCC has made a recommendation that changes Australia’s merger to require consideration of the effect of potential competition laws and the importance of data.

Also identified by the ACCC are worrying data practices which could cause consumers harm.

If data practices do not fit within the existing consumer law, the ACCC wants to have the power to call out unfair practices.

On the privacy side, the ACCC has also made a range of recommendations in its report including:

– Strengthening protections in the Privacy Act

– Broader reform of the Australian privacy law framework

– The introduction of a privacy code of practice specifically for digital platforms

– The introduction of a statutory tort for serious invasions of privacy.

The ACCC is also recommended the government establish a digital platform to branch within the ACCC so it can proactively monitor and investigate potentially anti-competitive conduct that may breach our consumer laws.