Big Tech on the ACCC backfoot

Denham Sadler
National Affairs Editor

The federal government should pursue “significant, holistic reform” to curb the market dominance of Google and Facebook and better protect the personal data of Australians, according to the competition watchdog’s Digital Platforms report.

Treasurer Josh Frydenberg released the ACCC’s final report from its 18-month inquiry into the impact of digital platforms like Facebook and Google on the media and advertising markets on Friday morning. The report had been handed to government at the start of the month.

The government will now undertake public consultations on the report before releasing its response by the end of the year.

At the end of 2017, then-Treasurer Scott Morrison tasked the ACCC with investigating the market power of the tech giant, and the competition watchdog released its preliminary report at the end of last year.

The final report includes 23 recommendations, with an overarching call for the government to address the dominance of the big technology companies with “significant, holistic reform”.

“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 future-proofing our enforcement, regulatory and legal frameworks.”

The Coalition has already agreed with the ACCC’s broad conclusion that reform is needed.

The ACCC stopped short of calling on the government to break up the tech giants, but has argued for a series of major reforms focusing on competition law, consumer protection, media regulation and privacy law.

The recommendations include requiring large tech firms to create codes to address the “imbalance in the bargaining relationship between platforms and news media”, the harmonisation of the media regulatory framework and grants supporting local journalist of $50 million per year.

The watchdog is also calling on the government to establish a specialist digital platforms branch within the ACCC which would have standing information gathering powers to “proactively monitor and investigate potentially anti-competitive conduct by digital platforms and conduct that may breach our consumer laws”.

Throughout the 18-month investigation, the ACCC found “problematic data practices with the potential to cause consumer harm”, along with privacy policies that were too long, complex and vague.

It called on the government to ban unfair commercial practices, and introduce a range of other measures to better protect the data of Australians..

They include the strengthening of the Privacy Act, reform to the Australian privacy law framework, the introduction of a privacy code of practice for digital platforms and a statutory tort for serious invasions of privacy.

The final report follows the release of a preliminary report at the end of last year, which included 11 recommendations and eight areas for analysis.

The ACCC has stuck by one of the more controversial measures included in the preliminary version, calling on the government to change merger laws to expressly require consideration of the impact on potential competition and the importance of any data that may be acquired.

This is in an effort to prevent large tech companies buying out small startups that could eventually turn into competitors, stifling competition in the process, but startups have raised concerns that this would hinder efforts to reach an exit.

The big tech firms targeted by the report have already gone on the front foot, with industry group DIGI, which represents Google, Facebook and Twitter, claiming the ACCC went beyond its terms of reference, and warning the government that the recommendations could impact the growth of the local tech sector.

“We urge the Australian government to assess the ACCC’s recommendations against an innovation test, closely examining how they will impact Australia’s digital industry at large and Australia’s global standing as a place to invest in technology,” DIGI managing director Sunita Bose said.

“The terms of reference of the inquiry were to look at the impact of digital platforms on competition in the media and advertising services market, with the incredibly important goal of protecting the future of journalism.

“We’re closely reviewing these recommendations to ensure they don’t bring unintended consequences to all digital businesses and the choice of digital products available to Australian consumers.”

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