The live-streaming of March’s Christchurch mosque shootings may have prompted Prime Minister Scott Morrison to hold Facebook accountable, but the final report of the ACCC’s Digital Platforms Inquiry (DPI) could spur the government into a much broader crackdown on the world’s digital giants.
Commissioned by the former Turnbull government, the DPI evaluated the effect of the top-heavy digital media market on competition in the news media and advertising services markets.
After months of enquiries and over 180 submissions, the 619-page final report included 23 recommendations that would, if implemented, fundamentally reshape social media, online news, privacy, and consumer rights.
Fixing a “distortionary” market
Conventional media outlets have long argued that light-touch regulation has created different rules for digital media giants, who have been able to outmanoeuvre even Australia’s highly concentrated media giants.
The ACCC agreed, noting that current policies have perpetuated a “distortionary” market balance that “should be addressed” with “holistic, dynamic reforms” including a single, platform-neutral regulatory framework for any entity producing or delivering content in Australia.
“Where digital platforms do perform comparable functions to media businesses, they should be regulated similarly,” the report noted.
“This would create a level playing field that promotes competition in Australian media and advertising markets.”
The ACCC says its findings were designed to be “forward-looking and adaptable to other digital platforms where appropriate”, but Google’s 96 per cent market share and Facebook’s social media stranglehold largely focused the report on the two companies.
Nielsen figures suggest that Australians spend 20.5 per cent of their online time using Google and its properties, and 18.6 per cent using Facebook and its WhatsApp, Instagram, and Messenger.
“The ability to determine the content and prominence of material displayed to consumers and the power to set the terms and conditions of access to their service provide Google and Facebook with opportunities to advantage their own related businesses,” the report notes.
“The significant amount of data that these platforms collect, including on rival businesses, cannot be easily replicated, providing them with a competitive advantage.”
Social media can do better
Digital giants had solidified their market dominance, the ACCC warned, by providing free services in a Faustian bargain in which “few consumers are fully informed of, fully understand, or effectively control, the scope of data collected and the bargain they are entering into with digital platforms when they sign up for, or use, their services.”
“There is a substantial disconnect between how consumers think their data should be treated and how it is actually treated.”
Abuse of consumer data has been a recurring theme for Facebook, which last year moved over 1.5 billion users out of a European data centre to avoid potentially costly GDPR violations.
More recently, it agreed to pay a $US5 billion ($A7.23b) fine over partner Cambridge Analytica’s misuse of 87 million users’ data.
The fine would have devastated any other company, but Facebook shares rose on the news because it resolved underlying uncertainty.
Yet growing concern over social media malfeasance has played into a post-Christchurch Morrison government narrative that emerged after the live-streamed shootings – broadcasted on Facebook and replicated over 1.5m times – spawned strict laws that would hold digital giants responsible if they didn’t remove “abhorrent” content.
Christchurch was outside of the DPI’s scope, but growing outrage has dovetailed with a more pervasive sense that social media organisations must be better regulated.
Yet change increasingly seems inevitable, with recent reports suggesting that Facebook co-founder Chris Hughes is advising the US government on how the company could be broken up.
Building a social media regulatory framework
The ACCC recommended “broader reform” of Australia’s privacy laws to keep pace with digital giants’ “increasing volume and scope of data collection”, suggesting the creation of a specialist data-analytics ACCC division to monitor and punish reaches of competition laws.
The Office of the Australian Information Commissioner (OAIC) would develop and manage an enforceable code of practice to manage digital platforms’ data practices, while “serious invasions of privacy” could become a statutory tort.
Digital firms would be required to offer erasure of personal information – the ‘right to be forgotten’ delivered by Europe’s general data protection regulation (GDPR) – and consumers could directly sue businesses for compensation when their privacy is breached.
Other ACCC recommendations include amending the definition of ‘personal information’ to include anything that can be used to identify an individual – IP addresses, device identifiers (known as MAC addresses), location data, and more.
The recommendations also prohibit “unfair” terms in consumer or small-business contracts; mandatory ACMA dispute-resolution standards to bolster visibility and punish breaches; and establishment of a digital-platforms ombudsman to police complaints and scams.
The ACCC also recommended forcing Google to allow Android users to choose their default search engine and Internet browser – echoing the US government anti-trust case, which was settled in 2009 when Microsoft agreed to let users choose from several browsers.
If it falls into line with the ACCC’s recommendations, the Australian government could see itself once again at the pointy end of social media and privacy reforms.
The Morrison government will respond to the ACCC report “in due course”, finance minister Mathias Cormann said, promising “sensible, appropriate and desirable ways to address” the issues raised.
Labor welcomed the report’s call for a “modern fit-for-purpose regulatory framework” and lambasted the Coalition over policy that “has perpetuated regulatory asymmetry, with major implications for Australian democracy, as well as our economy and society.”
Won’t get fooled again
Google, for its part, is arguing that big isn’t necessarily bad and warning that tighter regulation could have a slew of knock-on effects.
Yet the Media, Entertainment and Arts Alliance (MEAA) welcomed the ACCC report, with chief executive Paul Murphy noting that it had “laid out in stark terms the threat posed to public interest journalism by the rise of Google, Facebook and other similar businesses.”
“The ACCC has acknowledged that the ubiquity of Google and Facebook has placed them in a ‘privileged position’ in Australia’s media landscape where they have substantial bargaining power with news media businesses,” Murphy said.
Social media platforms’ ability to skew media coverage concerned the ACCC, which warned in the DPI that marginalisation by popularity-focused digital platforms had led to “the reduced production of particular types of news and journalism, including local government and local court reporting, which are important for the healthy functioning of the democratic process.”
The ACCC also called for support of conventional journalism including “stable and adequate” funding for the ABC and SBS, increased funding for local journalism, and adjustments to tax settings to allow advocates of public-interest journalism to obtain charity status.
Codes of conduct would manage digital platforms’ relationships with news media businesses to ensure they could have a say in data sharing; were assisted in monetising their own content; and engage in good-faith negotiations around revenue sharing.
A mandatory take-down code would facilitate copyright takedowns, encouraging proactive content policing by digital giants and helping copyright owners claw back content that is easily shared or diluted online.
The inquiry also took issue with the ease with which disinformation can be propagated through digital platforms, proposing the establishment of a Digital Platforms Code to improve handling of, and punishments for, the spread of disinformation deemed to be a “serious public detriment”.
The ACCC also wants a review of digital media literacy in Australian schools, and proposed a framework for community digital-media literacy based on boosting access to educational programs.