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ACCC chair outlines key questions in platforms inquiry

The unregulated market power of tech giants such as Facebook and Google and their impact on the quality of journalism will be at the forefront of the Australian Competition and Consumer Commission inquiry into digital platforms, commission chairman Rod Sims says.

In a speech delivered at the International Institute of Communications – Telecommunications and Media Forum on Tuesday, Mr Simms said the focus of the digital platforms inquiry will be centred on four key sets of questions:

  • Do digital platforms have market power and how is that being exercised, particularly in relation to competition?
  • Are digital platforms sufficiently transparent in the collection and use of consumer data? Are they complying with the Australian Consumer Law?
  • Do digital platforms have an unfair competitive advantage due to the unequal treatment of regulation?
  • Have digital platforms substantially changed media and advertising markets in Australia to the detriment of news, journalism and, therefore, Australia?

The questions were developed following the review of 57 submissions made to the inquiry, consultation with the community and research conducted by the ACCC.

“In assessing whether market power is being exercised, our job is not just to identify any ‘misuse of market power’ but to identify how market power affects commercial dealings with advertisers and with media companies. This is a much broader issue,” said Mr Sims.

“At this core, however, anti-trust policy and enforcement concerns itself with whether competition is being harmed, so this issue must have a large role in our inquiry. Can competition remain given the way the major platforms currently operate? Can new players emerge who may not, for example, rely as much on harvesting massive amounts of peoples’ data?”

The inquiry will focus on Facebook and Google, with Mr Sims noting that the pair were the two platforms most referenced in submissions, despite not being named within the issues paper. In addition, the ACCC also will look to the future in an attempt to identify potential disruptors to the market.

Mr Sims acknowledged that digital platforms are clear competitors for media companies, attracting advertising spend and complicating journalism and content models.

“Much has been written about Google and Facebook’s share of digital advertising revenue and, as our submissions tell us, traditional media have been significantly impacted by the reduction in advertising revenue,” Mr Sims said.

“We are also looking at the impact of the digital platforms on the quality of news and journalism in this country. Quality is extremely hard to assess, but broadly speaking we will

be investigating whether the reduction in advertising revenue prevents publishers and broadcasters from delivering quality journalism, by which we mean investigative, verified and diverse journalism.”

The regulator also will assess the impact of algorithmic selection and platform curation on users’ ability to consume news, particularly in relation to filter bubbles and echo chambers. Regulation also will be on the table, questioning whether digital platforms should be subject to defamation and copyright laws.

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