The ACCC has proposed more scrutiny of tech giants Facebook and Google.

The competition regulator has completed a review of the dominance of the leading digital platforms, finding many adverse effects, including:

  • The market power of Google and Facebook has distorted the ability of businesses to compete on their merits in advertising, media and a range of other markets
  • The digital advertising markets are opaque with highly uncertain money flows, particularly for automated and programmatic advertising
  • Consumers are not adequately informed about how their data is collected and used and have little control over the huge range of data collected
  • News content creators are reliant on the dominant digital platforms, yet face difficulties in monetising their content
  • Australian society, like others around the world, has been impacted by disinformation and a rising mistrust of news

“The dominant digital platforms’ response to the issues we have raised might best be described as ‘trust us’,” ACCC chair Rod Sims said.

“There is nothing wrong with being highly focused on revenue growth and providing increasing value to shareholders; indeed it can be admired. But we believe the issues we have uncovered during this Inquiry are too important to be left to the companies themselves.”

“Action on consumer law and privacy issues, as well as on competition law and policy, will all be vital in dealing with the problems associated with digital platforms’ market power and the accumulation of consumers’ data,” Mr Sims said.

The ACCC has made a string of recommendations to help improve the stakes.

One of these is to establish a specialist digital platforms branch within the ACCC, with standing information-gathering powers, to proactively monitor and investigate potentially anti-competitive conduct by digital platforms, and to undertake rolling market studies.

“We believe continuing scrutiny is necessary given the critical position that digital platforms occupy in the digital economy, their continued expansion and the opacity and complexity of the markets in which they operate,” Mr Sims said.

One of the first tasks of the new branch should be to conduct an inquiry into the supply of ad-tech services and the supply of online advertising services by advertising and media agencies.

The inquiry would identify whether any competition or efficiency concerns exist and help achieve greater transparency in the supply of these services.

“The ACCC branch will also provide regular reports to Government on issues as they arise, work closely with other arms of government to help co-ordinate work in this vital area, and be the crucial link with our overseas counterparts to share learnings and responses,” Mr Sims said.

The report contains 23 recommendations, spanning competition law, consumer protection, media regulation and privacy law, reflecting the intersection of issues arising from the growth of digital platforms.