ACCC calls for holistic digital platform reform

The ACCC’s Digital Platforms Inquiry has concluded that widespread, holistic reforms are needed to address the dominance of the top digital platforms and their impact across Australia’s economy.

The final report from the inquiry includes 23 recommendations aimed at addressing the disproportionate market power of webscale providers such as Google and Facebook, and the distorting effect they are having on competition across a range of markets.

These recommendations span competition law, consumer protection, media regulation and privacy law, which ACCC Chair Rod Sims said reflects the intersection of issues arising from the growth of digital platforms.

“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,” he 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 futureproofing our enforcement, regulatory and legal frameworks.”

The inquiry found that the market power of Google and Facebook has distorted the ability of smaller business to compete on their merits in the advertising, media and other markets.

In addition, consumers are not being adequately informed about how their data is collected and used by such providers and have little control over the wide range of data collected.

The inquiry also addressed issues such as Google and Facebook distorting competition via acquiring potential competitors.

Two recommendations aiming to address this issue include changing merger law to consider the likelihood that an acquisition will result in the removal from the market of a potential competitor and requiring large digital platforms to notify the ACCC of proposed acquisitions that may impact competition in Australia.

The ACCC has also recommended that Google be instructed to provide Australian Android users with a choice of search engine and internet browsers under a similar regime to the one being rolled out in Europe.

Another focus of the inquiry involves the impact of digital platforms on the news and media industries. The report found that news content creators are reliant on the dominant digital platforms, yet face difficulties in monetising their content.

Recommendations to address these issues include requiring select digital platforms to provide ACMA with industry codes to address the imbalance in the bargaining relationship between these platforms and news media businesses, harmonising the media regulatory framework to address the regulatory imbalance between news media and digital companies, and providing targeted grants of around $50 million per year to support local journalism.

To address the rise of fake news, ACMA has recommended requiring digital platforms to design and implement an industry code for handling complaints about deliberately misleading and harmful news stories.

The ACCC also made a range of privacy-related recommendations, including strengthening the Privacy Act with new consumer protections, introducing a privacy code of practice specifically for digital platforms and developing a statutory tort for serious invasions of privacy.

“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,” Sims said.

“Due to growing concerns in this area, we believe some of the privacy reforms we have recommended should apply economy wide.”

Finally, to enable continued scrutiny of digital platforms, the report recommends that the government establish a specialist digital platforms branch within the agency to monitor and investigate potentially anti-competitive conduct by digital platforms.

The ACCC recommends that one of the first tasks of the new branch should be launching an inquiry into the supply of advertising technology and online advertising services to identify any privacy or efficiency concerns.

Future law enforcement and regulation of digital platforms should be undertaken by current regulators including ACMA, the Office of the Australian Information Commissioner (OAIC) and the ACCC.

“There has been global interest in this timely Australian inquiry and the many significant international reports and external developments in the past 18 months. These reports demonstrate the shared concerns and momentum for reform,” Sims said.

“The world has now recognised the impact of the digital platforms’ market power and the impact this has on consumers, news, businesses and society more broadly. Continuing national and world action will now follow.”

Image credit: ©stock.adobe.com/au/Raman Khilchyshyn

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