Facebook And Google Have Too Much Power – And The ACCC Is Worried

The ACCC has released a preliminary report into the market power being exerted by major digital platforms such as Google and Facebook. And while the commission’s inquiry continues, it’s clear it is looking at ways to curb the influence digital platforms have given they are privately run and have operated outside the traditional regulatory regimes.

Its focus has been on search engines, social media platforms and digital content aggregators with the spotlight brightly directed at Facebook and Google given their powerful influence.

The 341 page Digital Platforms Inquiry Preliminary Report covers a lot of ground. But one early statement stood out to me.

However, the ubiquity of digital platforms mean many consumers feel they have to join or use these platforms, and agree to their non-negotiable terms of use, in order to receive communications and remain involved in community life.

The ACCC points to a couple of major issues. Firstly, most people aren’t aware of the extent of data that is collected and how it is used and shared by digital platforms because the length, complexity and ambiguity of online terms of service and privacy policies makes that information opaque.

Adding to that is a power imbalance. Many digital platforms’ agreements have “take-it-or-leave-it” terms that limit consumers trying to make well-informed decisions about consent to digital platforms’ use of data.

Digital platforms have been able to get away with this because there simply haven’t been any laws in place to deal with the practices they have built and depend on.

The commission says it’s time for the government to get on the front foot and confront this issue, look at creating International agreements and provide funding to support regulation. To support that, the ACCC has tabled 11 recommendations. These are:

1. Merger law: This would look at the impact of a proposed merger or acquisition between major digital network players.
2. Prior notice of acquisitions: Large digital platforms like Facebook and Google will have to provide advance notice of the acquisition of any business with activities in Australia so there could be a review of the likely competitive effects of the proposed acquisition.
3. Browsers and search engines: Users will get to choose their browser and search engine rather than the decision made for us through defaults that are pre-configured.
4. Advertising and related business oversight: A regulatory authority should be tasked to monitor, investigate and report on whether digital platforms are engaging in discriminatory conduct.
5. Review of media regulatory frameworks: Current media regulation effectively misses social platforms when it comes to regulating media behaviour. A new framework needs to be created so online media distribution is regulated.
6. Take-down standard: Protection against the unlawful distribution of copyrighted material.
7. Use and collection of personal information: The ACCC proposes a number of amendments to the Privacy Act to help consumers make better decisions about how their data is collected and managed.
8. OAIC Code of Practice for digital platforms: The ACCC wants the OAIC (Office of the Australian Information Commissioner) to engage with key digital platforms operating in Australia to develop an enforceable code of practice under the Privacy Act so Australians have greater transparency and control over how their personal information is collected, used and disclosed by digital platforms.
9. Serious invasions of privacy: The ACCC wants the Government adopt the Australian Law Reform Commission’s recommendation to introduce a statutory cause of action for serious invasions of privacy.
10. Unfair contract terms: The commission wants unfair contract terms to be deemed be illegal (not just voidable) under Australian Consumer Law and for civil penalties to apply to their use as a deterrent.

The ACCC’s report also summarises many of the changes that have accompanied the rise of these platforms such as the reduction in the number of journalists, the slashing of advertising revenues and increased use of news aggregators.

I haven’t spoken to anyone over the past year who thinks the power and influence of digital platforms isn’t a cause of concern. But, until now, I haven’t seen a coherent plan for how to deal with that power. In most cases, the global reach, corporate structures and inertia of legislative and legal systems have created a vacuum which Google, Facebook and others have filled. It is undeniable that social media, search engine algorithms and other online tools strongly impact us.

There’s little doubt that fake accounts and bots influenced the outcomes of the Brexit vote and the 2016 US presidential election.

We’ve seen Twitter shut down millions of accounts and the Cambridge Analytica scandal opened the floodgates on a number of breaches of trust between Facebook and its two billion or so subscribers.

The power of a Google search result in telling people what is true or not is undeniable. And when any of those services, or many others, change how they work the impact on what we see or the operation of a business can be significant.

One of the big challenges facing the ACCC – this report was commissioned by Prime Minister Scott Morrison back when he was the Treasurer – is that the global and ubiquitous nature of the companies it wants to regulate will require global cooperation. And that cooperation will require those companies to play nicely as well. I wonder if they’ll be inclined to work with the same government that ignored them when it came to the recent encryption law changes.