Daily Management Review

Facebook And Google To Face Strict Scrutiny Over Market Dominance In Australia


Facebook And Google To Face Strict Scrutiny Over Market Dominance In Australia
A call for the Australian government to take appropriate action against the market dominance of Facebook and Google in Australia was given by the Australian Competition and Consumer Commission (ACCC) in a 600-page report released in July.
Responding the exhaustive report that explains the basis of such a recommendation by the ACC, the government has said that a new unit within the ACCC will be set up at a cost of almost $27 million which will be tasked to closely monitor the state of competition on the various digital platforms.
The responsibility of drawing up a voluntary code of conduct to govern the relationship between digital platforms and media businesses will also be given to the ACCC.
"The rules that exist in the real world need to exist in the digital world," Prime Minister Scott Morrison said. "If it's the wrong thing to do in the real world, then it's the wrong thing to do in the digital world."
According to analysts, the new regulations could mandate the large tech companies to disclose to its users about what the companies do with the personal data of the users and how they treat such data, obtain proper consent for use of private information of users and be ready to face large penalties in case of breach of privacy laws.
The suggestion for a review of the Privacy Act has been agreed to by the government. According to the ACCC, in order to give Australians greater power over how their information is collected and used, the current Privacy Act needs to be strengthened.
The ACCC report noted a "substantial disconnect between how consumers think their data should be treated and how it is actually treated" while making 23 recommendations for the government.
The ACCC should be so designed that it becomes a world-leader in regulating the digital platform and ensuring that large digital firms such as Facebook and Google were well regulated and abuse of Australians, particularly children, by the companies was prevented. Morrison said.
18 of the 23 recommendations were supported by the government in varying degrees. Two of the ACCC's recommendations were refused support by the government.
Those recommendations turned down by the government included a regulation that would make it mandatory for taking down of content to help in copyright enforcement on digital platforms and a significant change in the taxation policy of digital companies so that the proceeds form it could be used for encouraging philanthropic support for journalism.
More than half local ad revenues of Australia will be devoured by the likes of Google and Facebook within a couple of years and traditional media players will be left with very little ad revenue.
Examination of the advertisements appearing on websites would also be conducted by the ACCC and he would direct such an examination, said Treasurer Josh Frydenberg.
The Government would pursue a mandatory code, if a voluntary code of conduct wasn't adopted, he said. "The Government will be seeking an update from the ACCC on the development of these codes by May and we're expecting that a voluntary code will be entered into by November," he said.
"If no voluntary code is satisfactorily entered into, the Government will move forward with a mandated regulatory outcome. So the companies are on notice. The Government is not messing around. We will not hesitate to act."