ACCC to probe major digital platforms

The federal government has instructed the ACCC to launch an inquiry into digital platform providers such as Google and Facebook and their impact on competition.

The inquiry will explore the effect that online search engines, social media platforms and other digital content aggregation platforms are having on competition in the media and advertising services markets, including the quality of news and other journalistic content.

It will also seek to examine whether platforms are exercising market power in commercial dealings that are detrimental to consumers, media content creators and advertisers, and explore the impact on competition of information asymmetry between platform service providers, advertisers and consumers.

“The ACCC goes into this inquiry with an open mind and will study how digital platforms such as Facebook and Google operate to fully understand their influence in Australia,” ACCC Chairman Rod Sims said.

“The ACCC will look closely at longer-term trends and the effect of technological change on competition in media and advertising. We will also consider the impact of information asymmetry between digital platform providers and advertisers and consumers.”

Sims said the inquiry is motivated by the long-term trend of advertising revenues shifting from print to digital media and other alternate channels, and the far lower relative cost of digital advertising.

“As the media sector evolves, there are growing concerns that digital platforms are affecting traditional media’s ability to fund the development of content. Through our inquiry, the ACCC will look closely at the impact of digital platforms on the level of choice and quality of news and content being produced by Australian journalists.”

The ACCC will be able to use its powers under the Competition and Consumer Act to use compulsory information-gathering powers and hold hearings to assess the level of competition in the market.

The regulator will be seeking the views of content creators, mainstream and smaller media outlets, platform providers, advertisers, consumers and small business interest groups. The final report is expected in early June 2019.

Communications Minister Mitch Fifield said the inquiry is aimed at strengthening competition in Australia’s media industry while supporting local jobs. It forms part of the government’s broader Broadcast and Content Reform Package.

Image credit: ©stock.adobe.com/au/violetkaipa

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