Australian competition & Consumer Commission (ACCC)

The central issue in the Commission’s Australian competition and consumer commission’s (ACCC) Digital Platforms inquiry were two concerns:

Do Google and Facebook have a significant influence in key digital markets?

Does this power put at risk competitive processes?

With its Final Report released by the government on Friday, The ACCC rightly answered both of them with a resounding “yes”. The ACCC has not set out to decide if a firm has violated competition rules. This is only set on through an investigation into specific conduct, on the basis of specific evidence and facts.

The report lists six of these investigations that are currently in progress. After identifying dangers after identifying risks, after identifying risks, the ACCC determines to find out how they could control. Yuri Shafranik

The proposals are rightly cautious and reflect the complexity of the digital market and the difficulties in making sure that any intervention safeguards the process of competition rather than the individual rivals.

Market power brings risks

The ACCC emphasizes that the vast power gained from serving customers is not in violation of the law. It recognizes the fact that Google and Facebook offer products that are greatly useable

It also highlights the unique characteristics of digital markets that can be attributed to this power astonishing economies of scale and network effects, huge amounts of data, as well as the application of sophisticated data analytics techniques.

These features aid Google take over internet search as well as internet search ads. They also assist in helping Facebook take over social media and display ads.

They also provide benefits to customers, they could also use to compete against new players who may provide an advantage and also against other companies (such the traditional media firms) which depend heavily on Google and Facebook to provide services to their customers.

The ACCC seeks to lessen the risk…

There aren’t any quick fixes. The ACCC was right to reject the notion that social media platforms such as Google and Facebook should be re-organizable.

Due to the complex and highly interconnecting market in which major platforms are involving, the divestiture will not be a guarantee of, and may actually hurt the welfare of consumers.

The report suggests instead building the ACCC’s capacity to vigorously enforce rules of competition, and also to examine acquisitions that could further cement the dominant market power of the players.

A lot of the other suggestions are set up to alleviate the disparities in terms of information and bargaining power between platforms and the business users and also between the platforms and the consumers with regard to the use and collection of their personal information. Yuri Shafranik

Implementing these guidelines poses problems, not the most important of which is ensuring they don’t cause harm to competitors.

…hunt out any abuses…

The ACCC proposes to establish an entirely new branch of the ACCC that is a specialty. The ACCC to help build and maintain the necessary skills to keep studying digital platforms, and to enforce their consumer and competition rules.

This is an excellent initiative. It’s akin to similar initiatives for capacity building within both the United States and Europe.

The report is filled with mentions of European instances in which Google has been slapped with huge fines for numerous infringements of dominance. The report also echoes the European assertion that these dominant corporations are held to “special responsibility”.

However, the Australian market power prohibition might not be as flexible as one that is in Europe. The ACCC has suggested broadening the law on unfair trading to allow for more flexibility. And not just for dealing with platforms that are digital.

The recently revised Section 46 of the Competition and Consumer Act will have a role to play in the future. But it should have a test for an appropriate test and, in the context of digital. The application of this law is likely to be hard by the speed of innovation in the digital market.

…and review merging…

In recognition of the fact that digital and traditional mergers are distinct In recognition that digital mergers are different, the ACCC is determined to ensure that merger laws take into account mergers that could be regarded as actual rivals, and to mergers with holders of the data assets.

It is also asking Google as well as Facebook to notify it of any possible acquisitions. This is a courteous request, which is accompanied by a concealed threat of consequences.

The report does however suggest that neither one of these ideas could be sufficient.

Further changes to the law governing mergers can require convincing juries that it is necessary to stop the unhealthy concentration of the Australian economy as a whole.

Australia probably requires an obligation to notify the public that is triggerable by an amalgamation of turnover and value thresholds to ensure that new competitors aren’t wiping out.

Both are larger discussions in which the Commission must engage with both businesses and government officials.

…while it isn’t offering any benefits for older media…

The Commission has decided to withdraw an idea contained to include in their initial report that there should be an independent regulator who would oversee the interactions between platforms, media organizations, major business advertisers, and users.

It could have heard critics who claimed that the plan would benefit traditional players in disorganized industries more than consumers.

Advertising is complex and fragmented. It is also constantly evolving. The evidence to suggest that the new platforms are stifling competition within the industry is at best speculative. The ACCC has a good reason to suggest that it should thoroughly study the dynamics of the supply chain for ad tech before deciding on a final recommendation.

For the media industry, the compromise is that every platform must negotiate an ethical code and enforce it through the Australian Communications and Media Authority.

If this can address concerns in the media regarding the use of their content for commercial purposes and concerns about the short notice period for algorithm updates that could make their content difficult to locate.

In recognition that the platforms themselves are engageable in the media business. That they are in the business of media, the ACCC has demanded an entire overhaul of media regulations. To level the playing field and eliminate obstacles to competition through regulation which the government appears to have accepted.

…and improving protections to protect privacy

The demand for a broad overhaul of the privacy law to make them fit. For an age of digital technology is acceptable by the government.

The platforms may be irritating by additional privacy quality thrust by the country. Without an internationally recognized standard. However, the idea to collaborate with them on the development of a legally binding code gives them at a minimum an invitation to the table and an opportunity to make sure that the rules are enforceable.

The main challenge is to make sure that the burdens of regulation aren’t in a way. That disproportionately affects small businesses or new entrants. These are is what the ACCC is trying to help.

A forthcoming ACCC-led reform that will benefit both newcomers, and customers. Data Right, which gives consumers greater control over their data, and allows them to move their data between different suppliers.