The 623-page final report on the Australia Competition and Consumer Commission (ACCC) inquiry into the impact of digital platforms has been keenly awaited by global regulators and publishers. And its final report, released Thursday, has proved to be the most comprehensive review of this increasingly hot potato.
It’s what makes the ACCC itself unique that makes its inquiry such an important contribution to the current platform debate.
It is the only major regulator anywhere that combines competition law and consumer protection under the same roof. So the scope of its inquiry was a world-first and covered the gamut of anti-trust policy through to journalism, advertisers, consumer welfare, and the sustainability of media businesses.
After 18 months of investigation, it uncovers what it says are many “adverse effects” of Google and Facebook and notes their power is having a “profoundly negative impact” on the news business.
Among its 23 recommendations are seven that have global significance:
- Competition law: Merger laws need to change to take into account the impact of platform power over consumer data that has proved so problematic for news media publishers trying to monetise content. Competition law needs to change to stop the giants buying start-ups, which may prevent future competition.
- Revenue sharing: A formal revenue-sharing regime is needed for the value the platforms obtain from the news content they carry, whether earned directly or indirectly.
- Privacy policies: There’s an implication that the tightening of privacy protections around the world, led by Europe’s General Data Protection Regulation (GDPR), doesn’t go far enough. The inquiry found that digital platforms’ privacy policies remain “long, complex, vague, and difficult to navigate.” In addition, consumers are still unaware of scale and depth of tracking of their personal information and what it is used for. “We’re very concerned that current privacy policies offer consumers the illusion of control but instead are almost legal waivers that give digital platforms’ broad discretion about how they can use consumers’ data.”
- Trust initiatives: The various trust initiatives to help highlight reliable stories for consumers don’t go far enough, either, whether run by the platform or philanthropic institutions. The Trust Project, based out of Santa Clara University in California, has gone some way to verifying and labeling news reliability and trustworthiness, and has been embraced by Facebook, Google, and Twitter. But the inquiry recommends the brand safety projects, while welcome, need permanent oversight by the national media regulator.
- Code of conduct: Like the Cairncross Review of journalism in the United Kingdom recently, this inquiry calls for a code of conduct to govern fair, reasonable, and transparent dealings between media and platforms. (If the platforms don’t each come up with one within nine months, one will be imposed on them.)
- Watchdog for algorithms: A permanent watchdog within the ACCC to monitor the platforms’ behaviour will be set up within the commission and will regularly test the algorithms that control advertising and journalism.
- Fund for journalism grants: Like a growing list of countries, the report recommends setting up a fund to directly support public interest journalism grants and also to allow tax deductibility of non-profit organisations that do the same.
What’s not in it
No break-up: There’s no break-up recommended. Yet. It leaves that path open. News Corp Australia had called on the commission to force Google to separate its search from its advertising businesses because of its dominance of global adtech. The ACCC, however, did find the practices of that market were so opaque that it immediately instigated a formal investigation into those practices.
No transparency requirements: It backed away from its preliminary finding to impose transparency requirements on the platform’s algorithms that control advertising and content rankings.
No collective negotiation: Noteworthy, too, was the inquiry’s decision not to replicate the bipartisan federal bill before the U.S. Congress that would allow collective negotiation between publishers and platforms to improve terms to help journalism. (While the ACCC could simply authorise such a collective bargaining period under its existing powers, the commission has apparently decided this path was inferior to other options to improve monetisation of public interest journalism).
While many of the recommendations don’t require a change of law to be enacted, it’s up to the Australian government to release its formal response after a period of public consultation. The government, which enjoys bipartisan support for clamping down on the platforms, has promised to reply before year’s end.
“Make no mistake, these companies are among the most powerful and valuable in the world,” said the Australian government treasurer, Josh Frydenberg, when releasing the report. “They need to be held to account and their activities need to be more transparent.
“The world has never before seen so much commercially sensitive and personal data collected and aggregated in just two companies,” he continued. “Our legislative and regulatory framework could not and did not anticipate such a new paradigm.”
This inquiry is one of more than 100 regulator or legal cases currently underway into the activities of Google, Facebook, Apple, and Amazon around the world.
Robert Whitehead is the author of the upcoming report for INMA’s new Digital Platform Initiative. The report, to be published in August, looks at the publisher-platform relationships, decodes the issues in that relationship, and prioritises a range of solutions.