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Just as Google and Facebook become increasingly more vital to the business of real estate across Australia, the ACCC has announced that it will investigate both platforms to understand the substantial market power they wield — particularly in respect of how they influence social media, search advertising and online news.
The ACCC has released a preliminary report that contains 11 preliminary recommendations and eight areas for further analysis.
The most significant of which is further analysis around allowing consumers to opt out of targeted advertising.
Other preliminary recommendations and areas for further analysis aim to address Google’s and Facebook’s market power and promote increased consumer choice.
They include preventing default browsers and search engines, monitoring ads and news content, “badging” accountable media content and funding the production of news and journalism.
ACCC chair Rod Sims said that the impact of the two platforms has been substantial.
“Digital platforms have significantly transformed our lives, the way we communicate with each other and access news and information,” Mr Sims said.
“We appreciate that many of these changes have been positive for consumers in relation to the way they access news and information and how they interact with each other and with businesses.
“But digital platforms are also unavoidable business partners for many Australian businesses. Google and Facebook perform a critical role in enabling businesses, including online news media businesses, to reach consumers. However, the operation of these platforms’ key algorithms, in determining the order in which content appears, is not at all clear.”
Data
The report outlines the ACCC’s concerns regarding the extent to which consumers’ data is collected and used to enable targeted advertising.
“The ACCC is concerned with the large amount and variety of data which digital platforms such as Google and Facebook collect on Australian consumers, which go beyond the data which users actively provide when using the digital platform,” it said via a media release published on its website.
“Without adequate information and with limited choice, consumers are unable to make informed decisions, which can both harm consumers and impede competition.”
It is also considering questions about the range and reliability of news available via Google and Facebook.
“The ACCC’s preliminary view is that consumers face a potential risk of filter bubbles and less reliable news on digital platforms,” it said.
“While the evidence of filter bubbles arising on digital platforms in Australia is not yet strong, the importance of this issue means it requires close scrutiny.”
The report also found that Google and Facebook had both the ability and incentive to favour related businesses or those businesses with which they may have an existing commercial relationship.
“The platforms’ algorithms rank and display advertising and news content in a way that lacks transparency to advertisers and news organisations,” it said.
Mr Sims added that Australian law does not prohibit a business from possessing significant market power, or from using its efficiencies or skills to “outcompete” its rivals.
“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,” the ACCC chair said.
“The inquiry has also uncovered some concerns that certain digital platforms have breached competition or consumer laws.”
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