ACCC recommends regulations for digital platforms

Google and Facebook are facing additional regulation as a result of an ongoing ACCC investigation into digital platforms and their impact on the Australian news and advertising markets.

The ACCC has published its preliminary report (PDF) into the investigation, which includes 11 initial recommendations for regulatory reform across eight areas.

Among the recommendations, the regulator has proposed to prohibit Google from pre-installing its internet browser Chrome on devices sold in the market or including the Google search engine as the default search engine on internet browsers.

The ACCC has also suggested that a new or existing regulatory authority be given the task of monitoring how large digital platforms rank and display ads and news content.

The recommendations are based on the ACCC’s finding that Google has substantial market power in online search, search advertising and news referral, and that Facebook has substantial power in the markets for social media, display advertising and online news referral.

While there is nothing in Australian law that prevents companies from having a dominant market position, the ACCC has taken the view that governments should seek to ensure that companies’ dominant market position does not create competitive or consumer harm.

As part of the inquiry, the regulator has been exploring important questions about the range and reliability of news available via Google and Facebook. The report details an initial finding that consumers face a potential risk of filter bubbles, or echo chambers, and less reliable news on digital platforms.

Google and Facebook were also found to have both the ability and incentive to favour their own businesses or those of their commercial partners over competing services by manipulating what are already opaque algorithms used to sort and display content.

In addition, the inquiry examined the impact of digital platforms on the struggling print journalism industry in terms of advertising revenue, finding that this trend has threatened the viability of print media business models and companies’ ability to monetise journalism.

Meanwhile, digital platforms’ data harvesting practices have also come under the spotlight, with the regulator raising concerns about the practice of using arcane, overly complex and take-it-or-leave-it terms of service and privacy policies.

“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,” said ACCC Chair Rod Sims.

“The inquiry has also uncovered some concerns that certain digital platforms have breached competition or consumer laws, and the ACCC is currently investigating five such allegations to determine if enforcement action is warranted.”

Image credit: ©stock.adobe.com/au/R. Roth

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