ACCC examining vital questions in media and advertising

3 July 2018

The impact of digital platforms on society was a vital issue for Australia and the world, ACCC Chair Rod Sims said in a speech at the International Institute of Communications’ Telecommunications and Media Forum in Sydney today.

“The question of how we approach the proliferation of digital platforms, and how they collect and manage our data, is one of the defining questions of our age,” Mr Sims said.

The ACCC is currently undertaking an inquiry into digital platforms which will consider the disruptive effect of digital platforms on society and consider current investigations and developments overseas.

“It is clear that we need to look at the digital platforms through both a competition and consumer lens. Our experience as a competition and consumer regulator, and as a communication and general infrastructure regulator … means we have the right tools to complete this huge and fascinating task,” Mr Sims said.

The investigation would explore four key questions, he said.

“The first question requires us to examine whether platforms have substantial ‘market power’ and, if so, how is that market power being used,” Mr Sims said.

The second question, he said, addressed the impact on consumers, and whether digital platforms were sufficiently transparent in the collection and use of consumer data and were complying with the Australian Consumer Law.

“We do not believe that consumers are generally well-informed about how digital platforms collect and use their data,” Mr Sims said.

“The issue is not just about the wording of a privacy policy. We will be also examining whether users appreciate the value of the data they are providing to these platforms, both when they are using these platforms, and also when they are not. In other words, are users ‘selling’ their data too cheaply in exchange for convenience?”

Mr Sims said the third question was: “Do digital platforms have an unfair competitive advantage due to the unequal treatment of regulation?”

“The digital platforms are clear competitors to media companies in the case of attracting advertising spend but the relationship on the content side is more complicated and there are a number of important questions: ‘Are the platforms subject to defamation law or journalism’s codes of conduct?’ ‘Should they be, and how practical is this?’ ‘How does copyright law apply to the digital platforms?’,” Mr Sims said.

“Finally, we are also looking at the impact of the digital platforms on the quality of news and journalism in this country. Quality is extremely hard to assess, but broadly speaking we will be investigating whether the reduction in advertising revenue prevents publishers and broadcasters from delivering quality journalism, by which we mean investigative, verified and diverse journalism.”

“Journalism is a highly valued profession, and crucial to our lives. Just like we are well advised not to rely on amateur doctors, perhaps we should not rely on amateur journalists,” Mr Sims said.

Mr Sims said: “It is important that governments examine the role digital platforms are playing in society and, as with other companies, determine if polices are needed to curb their pursuit of profit given the problems such pursuit will cause.”

“The question of the impact of digital platforms on society is a vital one, for both Australia and the world.”

The speech also touched on competition in the telecommunications industry.

“The ACCC is very keen to promote competition in wireless communications markets,” Mr Sims said.

“We don’t see particular generations of technology as being the focus of competition as these continue to evolve, but rather we view competition more broadly. We believe that the trade-offs between promoting an early roll out of 5G and competition must be carefully weighed to avoid any unintended consequences, particularly where a fourth mobile player is seeking to enter the market.”

A copy of the speech is available at Regulating for competition: stepping up for platforms & stepping back from media?

Release number: 
122/18
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