ACCC releases preliminary report on Google, Facebook and Australian news with significant recommendations on privacy law
December 10, 2018 |
Nature abhors a vacuum. That truism tends to apply, eventually, in law as in the natural world. Gaps in the law that are not filled by regulations are, often with baby steps, attended to by the courts. Similarly a failure by one regulator to attend to its garden will often find another regulator, with aligned interests, stepping in to carry the weight. And it is that last circumstance that applies with the ACCC’s preliminary report into Google, Facebook, Australian News and advertising. Amongst the 11 preliminary recommendations the ACCC proposes at recommendations 8 – 10 increasing privacy protections by amendment to the Privacy Act 1988 to improve notification requirements, strengthening consent requirements, enabling the erasure of personal information, enabling a person to bring an action for breach of the Privacy Act and introducing an action for serious invasion of privacy. The Information Commissioners’ Office has done very little with the powers it has. It may claim to be starved of funds but it is not credible for it to have taken such little action given the poor privacy culture and many opportunities to take overt and public actions. It is timid and conflict averse. The result is that it has been and remains an ineffective regulator. It is not surprising then that the ACCC is seeking to have individuals have greater powers to take action. That said, such amendments make logical sense in any event. In addition the ACCC recommends giving the Information Commissioner more powers to deal with consents and breaches.
The OAIC response is about what one would expect of that regulator; vapid, anodyne and trite. That is consistent with its modus operandi of “Better to say little and do nothing than make a mistake”. It provides:
The Office of the Australian Information Commissioner (OAIC) welcomes the focus on proposed measures to strengthen privacy protections for individuals in the preliminary Digital Platforms Inquiry report from the Australian Competition and Consumer Commission (ACCC).
The report provides insights into the collection and use of personal data by digital platforms and Australians’ concerns about these practices.
A number of the ACCC’s preliminary recommendations build on the foundations of the Privacy Act, which requires transparency and accountability in data handling.
Consent, codes and certifications can work together to support individuals to exercise greater choice and control over their data and provide greater accountability for how personal information is used.
The introduction of erasure requirements and increased penalties would also help ensure Australia’s data protection framework adapts to meet the regulatory challenges emerging in the digital economy.
The OAIC will examine the proposals in detail and provide a response in February.
This report is a huge breath of fresh air although, as the ACCC acknowledges, some of these recommendations have been made before. The ACCC, unlike the Australian Information Commissioner, is quite an active regulator and has a strong history to improve compliance in its bailiwick. It sometimes fails but that is not for want of trying.
Submissions are open until 15 February 2019.
Recommendations 8 – 11 provide:
With Google and Facebook transforming the way consumers communicate, access news and view advertising online, it is critical that governments and regulators consider the potential issues created by the concentration of market power and the broader impacts of digital platforms.
The preliminary report, published today, contains 11 preliminary recommendations and eight areas for further analysis as the inquiry continues.
The ACCC has reached the view that Google has substantial market power in online search, search advertising and news referral, and Facebook has substantial market power in markets for social media, display advertising and online news referral.
The report outlines the ACCC’s concerns regarding the market power held by these key platforms, including their impact on Australian businesses and, in particular, on the ability of media businesses to monetise their content. The report also outlines concerns regarding the extent to which consumers’ data is collected and used to enable targeted advertising.
“Digital platforms have significantly transformed our lives, the way we communicate with each other and access news and information. We appreciate that many of these changes have been positive for consumers in relation to the way they access news and information and how they interact with each other and with businesses,” ACCC Chair Rod Sims said.
“But digital platforms are also unavoidable business partners for many Australian businesses. Google and Facebook perform a critical role in enabling businesses, including online news media businesses, to reach consumers. However, the operation of these platforms’ key algorithms, in determining the order in which content appears, is not at all clear.”
Google and Facebook are now the dominant gateways between news media businesses and audiences and this can reduce the brand value and recognition of media businesses. In addition traditional media businesses and in particular, traditional print media businesses, have lost advertising revenue to digital platforms. This has threatened the viability of business models of the print media and their ability to monetise journalism.
“News and journalism perform a critical role in society. The downturn in advertising revenue has led to a cut in the number of journalists over the past decade. This has implications across society because of the important role the media plays in exposing corruption and holding governments, companies, powerful individuals and institutions to account,” Mr Sims said.
The inquiry has also considered important questions about the range and reliability of news available via Google and Facebook. The ACCC’s preliminary view is that consumers face a potential risk of filter bubbles, or echo chambers, and less reliable news on digital platforms. While the evidence of filter bubbles arising on digital platforms in Australia is not yet strong, the importance of this issue means it requires close scrutiny.
The ACCC is further concerned with the large amount and variety of data which digital platforms such as Google and Facebook collect on Australian consumers, which go beyond the data which users actively provide when using the digital platform.
Research commissioned as part of the inquiry indicates consumers are concerned about the extent and range of information collected by digital platforms. The ACCC is in particular concerned about the length, complexity and ambiguity of online terms of service and privacy policies, including click-wrap agreements with take-it-or-leave-it terms.
Without adequate information and with limited choice, consumers are unable to make informed decisions, which can both harm consumers and impede competition.
The preliminary recommendations and the areas for further analysis identified in the preliminary report have been put forward as potential options to address the actual and potential negative impacts of digital platforms and contribute to the debate about the appropriate level of government oversight.
The report found that key digital platforms, Google and Facebook, had both the ability and incentive to favour related businesses or those businesses with which they may have an existing commercial relationship. The platforms’ algorithms rank and display advertising and news content in a way that lacks transparency to advertisers and news organisations.
“Organisations like Google and Facebook are more than mere distributors or pure intermediaries in the supply of news in Australia; they increasingly perform similar functions as media businesses like selecting, curating and ranking content. Yet, digital platforms face less regulation than many media businesses,” Mr Sims said.
“The ACCC considers that the strong market position of digital platforms like Google and Facebook justifies a greater level of regulatory oversight,” Mr Sims said.
“Australian law does not prohibit a business from possessing significant market power or using its efficiencies or skills to ‘out compete’ its rivals. But when their dominant position is at risk of creating competitive or consumer harm, governments should stay ahead of the game and act to protect consumers and businesses through regulation.”
The report makes preliminary recommendations aiming to address Google and Facebook’s market power and promote increased consumer choice, including a proposal that would prevent Google’s internet browser (Chrome) being installed as a default browser on mobile devices, computers and tables and Google’s search engine being installed as a default search engine on internet browsers.
The ACCC also proposes that a new or existing regulatory authority be given the task of investigating, monitoring and reporting on how large digital platforms rank and display advertisements and news content. Other preliminary recommendations suggest ways to strengthen merger laws.
Additional preliminary recommendations deal with copyright, and take-down orders, and the review of existing, disparate media regulations.
The ACCC also notes that consumers will be better off if they can make informed and genuine choices as to how digital platforms collect and use their data, and proposes changes to the Privacy Act to enable consumers to make informed decisions.
The ACCC is further considering a recommendation for a specific code of practice for digital platforms’ data collection to better inform consumers and improve their bargaining power.
“The inquiry has also uncovered some concerns that certain digital platforms have breached competition or consumer laws, and the ACCC is currently investigating five such allegations to determine if enforcement action is warranted,” Mr Sims said.
The ACCC is seeking feedback on its preliminary recommendations, and the eight proposed areas for further analysis and assessment.
These eight areas for further analysis include the proposed ‘badging’ by digital platforms of media content, produced by an accountable media business, as well as options to fund the production of news and journalism, such as tax deductions or subsidies, a digital platforms ombudsman to investigate complaints and provide a timely and cost effective means to resolve disputes, and a proposal for digital platforms to allow consumers to opt out of targeted advertising.
Australia’s corporate watchdog has unveiled 11 preliminary recommendations to clamp down on Google and Facebook’s market dominance, including closer scrutiny of their activities by a government agency, new data collection rules and a review of “disparate” media laws.
The Australian Competition & Consumer Commission’s preliminary report includes a proposal that would prevent Google’s internet browser Chrome being installed as a default on mobile devices, computers and tables and Google’s search engine being installed as a default search engine on internet browsers.
As revealed by The Australian, the ACCC has also proposed that a new or existing regulatory authority investigate, monitor and report on how large digital platforms rank and display advertisements and news content.
Additional preliminary recommendations deal with copyright, and take-down orders, and the review of existing, disparate media regulations. Other preliminary recommendations suggest ways to strengthen merger laws.
ACCC chair Rod Sims said digital platforms have “significantly transformed” people’s lives, in terms of the way they communicate and the access news and information.
“But digital platforms are also unavoidable business partners for many Australian businesses. Google and Facebook perform a critical role in enabling businesses, including online news media businesses, to reach consumers. However, the operation of these platforms’ key algorithms determining the order in which content appears is not at all clear,” Mr Sims said in a statement.
“Organisations like Google and Facebook are more than mere distributors or pure intermediaries in the supply of news in Australia; they increasingly perform similar functions as media businesses like selecting, curating and ranking content,” he said.
“Yet, digital platforms face less regulation than many media businesses.
“The ACCC considers that the strong market position of digital platforms like Google and Facebook justifies a greater level of regulatory oversight,” Mr Sims said.
A spokeswoman f or US giant Google said the preliminary report examines “important topics”, but was tight lipped on the recommendations.
“As we put forward in our submission, we develop innovative products to the benefit of consumers, businesses and the economy, and we work closely with advertisers and publishers across Australia. We will continue to engage with the ACCC between now and the final report next year.”
Facebook wasn’t immediately available to comment.
The ACCC said Google and Facebook were “now the dominant gateways between news media businesses and audiences and this can reduce the brand value and recognition of media businesses.
“In addition, traditional media businesses and in particular, traditional print media businesses, have lost advertising revenue to digital platforms. This has threatened the viability of business models of the print media and their ability to monetise journalism.”
Mr Sims said “news and journalism perform a critical role in society.
“The downturn in advertising revenue has led to a cut in the number of journalists over the past decade. This has implications across society because of the important role the media plays in exposing corruption and holding governments, companies, powerful individuals and institutions to account,” he said.
In the long-awaited 378-page preliminary report, the ACCC said commercial media, in particular traditional print media, first suffered a major hit in advertising revenue with the unbundling of classified advertisements from newspapers. That led to a sharp drop in classified ad revenue to $200 million in 2016 from $2 billion in 2001.
At the same time, competition intensified from international sources and other media, both commercial and publicly funded.
The ACCC said the drop in revenue has also hit the funding of Australian news and journalism, which is a grave concern.
“The reduction in journalist numbers is important given the critical role news and journalism perform in society. Even those members of the public that do not read, watch or listen to the news benefit from the role journalism performs in exposing corruption, the creation of public debate and holding governments, corporations and individuals to account through their questioning and investigation.”
In addition to the 11 preliminary recommendations, the ACCC has also identified eight areas for further analysis, including the proposed “badging” by digital platforms of media content produced by an accountable media business.
Other areas for further investigation include options to fund the production of news and journalism, such as tax deductions or subsidies, a digital platforms ombudsman to investigate complaints and provide a timely and cost effective means to resolve disputes, and a proposal for digital platforms to allow consumers to opt out of targeted advertising.
The ACCC has spent the past year investigating the impact of digital platforms on competition in media and advertising services market, particularly the supply of news and journalistic content, as directed by the then treasurer Scott Morrison last December.
A final report will be submitted to the government by June 3.
The ACCC’s 11 recommendations are:
- Suppliers of operating systems for mobile devices, computers and tablets be required to provide consumers with options for internet browsers rather than providing a default browser, as well as a search engine
- Major digital companies to provide advance notice of acquisitions in Australia
- A regulatory authority should monitor, investigate and report on digital platforms
- A regulatory authority could also monitor, investigate and report on the ranking of news and journalistic content by digital platforms and the provision of referral services to news media businesses
- The government conduct a review of media regulatory frameworks
- The Australian Communications and Media Authority determine a mandatory standard regarding digital platforms’ removal procedures for copyright infringing content
- Amendments to the Privacy Act on the use and collection of personal information
- The Office of the Australian Information Commissioner to introduce a code of practice for digital platforms
- Changes to merger law
- The government adopt the Australian Law Reform Commission’s recommendation to introduce a statutory cause of action for serious invasions of privacy
- Unfair contract terms should be illegal under the Australian Consumer Law