Duopoly likely to face stricter scrutiny in Australia

Facebook and Google can expect the Australian government to begin taking a more active interest in their activities when it comes to mergers and acquisitions, the ranking and placement of advertising, the publication of news and the handling of consumer privacy.

That's based on a preliminary report issued this morning by the ACCC (Australian Competition and Consumer Commission). The report is the product of an inquiry process that began in December last year and received opinions on the topic from nearly 60 industry players by May of this year. 

The report includes 11 preliminary recommendations (summarised below).

Three of the recommendations warrant special attention. No. 4 and No. 5 call for giving the government broad powers to police the way digital platforms rank and present both advertising and journalistic content. No. 8 calls for significant changes to privacy regulation and suggests a regime similar to that now in place in Europe, with potentially severe penalties for violations. 

1. Amend merger law to make more clear the importance of two factors: whether an acquisition would remove a potential competitor, and the amount and nature of data the acquirer would gain access to.
2. Establish a requirement to provide advance notice of acqusitions, with ample time for the government to review them.
3. Require suppliers to provide a choice of internet browsers and search engines in operating systems and on devices.
4. Task the regulatory authority to monitor, investigate and report on whether digital platforms are engaging in discriminatory or anti-competitive conduct by favouring their own business interests above those of advertisers or potentially competing businesses. This would apply to digital platforms that generate more than AU$100 million (US$72.2 million) per year from digital advertising in Australia, and would look at factors such asƒ the ranking and display of advertisements and organic content.
5. Task the regulatory authority to monitor, investigate and report on the ranking of news and journalistic content by digital platforms and the provision of referral traffic to news media businesses. Again, this would apply to digital platforms that generate more than AU$100 million per year in revenue in Australia.
6. Conduct a separate, independent review to design a regulatory framework that can effectively and consistently regulate the conduct of all entities involved in the production and delivery of content, including publishers, broadcasters, other media businesses and/or digital platforms.
7. Determine rules around take-down procedures for copyright-infringing content.
8. Amend the Privacy Act to help consumers make informed decisions about and have greater control over the collection and use of personal information. This includes factors such as clearer notification and consent, as well as stiffer penalties and third-party auditing of compliance.
9. Develop of a code of practice for digital platforms.
10. Adopt of a statutory 'cause for action' for serious invasions of privacy.
11. Make unfair contract terms illegal (not just voidable) and impose penalties to deter business from unfairly leveraging their bargaining power over consumers.

Still on the table

In addition to the above, the report outlines a number of issues needing further analysis and assessment. Of the most direct interest to the advertising ecosystem, this list includes:

• Whether the government should monitor pricing practices, requiring companies to provide information on the median price charged for each product offered, how that price is determined, the revenue received for each product or service, and any discounts, rebates or other incentives offered.
• Assessing whether current practices around third-party verification of viewability adequately address the issue.
• Going even further than recommendation no. 8 above, by requiring that entities obtain express, opt-in consent from consumers in order to collect, use, or disclose personal information for the purposes of serving targeted advertising.

The list of topics needing further study also includes measures to assess a content provider's level of journalistic quality and communicate that consumers; efforts to improve news literacy and combat 'fake news'; measures to improve the funding of news and journalism; and the appointment of a digital ombudsman.

The ACCC report calls for feedback from concerned parties by 15 February. According to the report, the ACCC may also use its powers under the Competition and Consumer Act 2010 to compel parties to provide more information. And it also may hold stakeholder forums early in 2019.