What the ACCC's final report on digital platforms to the Australian government means

It also recommends that merger laws be updated and that the ACCC establish a new digital markets branch with information-gathering powers to provide regular reports to the Australian government.

In total, the report makes 23 recommendations and notes "there is a substantial disconnect between how consumers think their data should be treated and how it is actually treated".

In response to the report, Josh Frydenberg, the treasurer of Australia, the minister responsible for government expenditure and revenue-raising, said the government accepted the report but would need a year-long consultation period before responding.

The ACCC had previously released a preliminary report in December 2018 that raised concerns about five incidences of breaches by Facebook and Google to competition or consumer laws, including the companies’ impact on Australian businesses, particularly, their ability to monetise content.

It also outlined concerns about the extent that consumers’ data is collected and used by companies to target advertising.

It then called on the advertising industry in February to provide feedback on several preliminary recommendations before the final report.

In the course of producing the final report, the ACCC had received submissions from the likes of Rupert Murdoch’s News Corp.

“Google leverages its market power in both general search services and ad tech services to the detriment of consumers, advertisers and news publishers,” News Corp wrote.

“To remedy these harms, Google could either sell Google Search or retain Google Search and divest the rest of its businesses to a third party,” the report said. News Corp owns several big news publications including The Wall Street Journal and The Times newspaper in the UK.”

Reactions from the industry

The IAB Australia said it was pleased that the digital platforms inquiry final report recognises the importance of an advertising-funded model in allowing consumers to freely access a wide range of important content and services.

It said it will closely review the recommendations made in the report and will work actively with both the industry and government to identify the best approaches to meet the new consumer-focused privacy recommendations as well as drive further transparency in the ad tech supply chain.

“Consumers have increasingly come to expect that their online experience is customised and relevant to them,” it said in a statement.

“As an industry, it’s essential therefore that we work together to find the right balance between delivering customised and relevant content and advertising experience to consumers which respects their privacy, while also allowing businesses to operate in a way that allows them to meet those consumers expectations.”

It added that it is well equipped to deliver given its considerable experience driving consumer and industry standards and guidelines locally. For example, it said it has been working with governments and industry around the world to implement solutions that work for both consumers and business.

“IAB Australia’s purpose is to drive sustainable and diverse investment in digital advertising in Australia and we look forward to continuing to drive important market initiatives that support this purpose,” it said.

Nine, one of three main free-to-air commercial networks in Australia also said it welcomed the recommendations in the final report.

“We’d like to congratulate the ACCC and the government for the initiative they’ve taken and for the comprehensive nature of the response,” said Hugh Marks, chief executive of Nine.

“The ACCC has successfully identified the steps that need to be taken to bring about change for the benefit of Australian consumers and Australian businesses, in what is a complex area.

“We’re enthused by the strength of the Government’s clear commitment to implement that change - to protect the personal rights of Australians using digital platforms, to ensure the accuracy and reliability of information provided to Australians and to provide a framework that will assist content creators and owners to fairly monetise the results of their work.

“We look forward to being involved constructively with the ACCC and the government as we move through to outcomes. We stress the importance of taking action within the timeframes recommended by the ACCC.”

However, new research from the Audited Media Association of Australia (AMAA) found that the ad industry was unaware of the release of the final report as 43% out of 500 people surveyed said they had never heard of the ACCC’s preliminary report

According to the survey, in May and June 2019, seven in 10 said they had little or no awareness of it, while only three in 10 respondents had read any of the report or about it.

A total of 62% of respondents agreed with the statement that ‘Government regulation of global digital platforms is inevitable’, however, 43% of total respondents indicated they had ‘never heard’ of the ACCC preliminary report.

49% of agency respondents were in this group with 46% of this being agency senior execs and middle management.

The AMAA said this showed despite the majority of respondents considering that government regulation for global platforms is inevitable, the study indicates that a large proportion of the industry shows a dramatic lack of awareness and are uninformed on the ACCC’s digital platforms inquiry and the preliminary recommendations

“We have chosen to release a snapshot of our upcoming annual Media Trust Research survey early in light of the ACCC’s releasing the final report of its digital platforms inquiry due to the low level of awareness among the respondents,” said Josanne Ryan, chief executive of AMAA.

“The industry has now had a wakeup call and no doubt the final report will be compulsory reading given there is to be a twelve-week consultation period as the government steps in to weigh up no less than 23 recommendations from the ACCC.”

Reactions from tech giants

A spokesman for Google Australia said the company would continue to engage with the Federal Government on the report's recommendations.

"The final report examines important topics in relation to Australia's changing media and advertising industry and we have engaged closely with the ACCC throughout the process," he said.

Will Easton, the managing director of Facebook Australia and New Zealand, said the company had worked with the ACCC over the past 18 months, and remained "fully committed to engaging in the consultation process around this report".

"It is important to get the rules for digital news distribution right, as they could impact the 16 million Australians who use our services to connect, share, and build community, as well as the hundreds of thousands of small businesses that use our free tools to grow, thrive, and create jobs," he said.

Facebook had previously criticised the ACCC's inquiry for its ‘unprecedented’ proposals.

It warned that the proposals in the report will restrict Australians’ access to online services and accused the ACCC of protecting the interests of a few small media companies, not journalism

However, it has also sought to appease the market and avoid regulation by announcing an A$5m ($3.6m) investment in the Australian news ecosystem to support journalists, academics and news organizations.

In the US, it has been fined $5bn for its part in the Cambridge Analytica data privacy breach.