Tech giants like Google and Facebook are increasingly coming under scrutiny from competition authorities and governments around the world. From Europe to the US, there are investigations looking into the impact of digital platforms and the possible use and effects of market power. Australia has recently joined the international chorus, with the Australian Competition and Consumer Commission (ACCC) commencing an 18-month inquiry into digital platforms. So, what’s driving this review and why is it important?
The competition regulator will be studying whether and how high-tech companies are using their market power in Australia, whether they are disadvantaging traditional media players and whether the diversity and quality of news content are being affected. The inquiry was announced after the latest round of journalism job cuts in December 2017. There’s been massive disruption in the conventional media landscape with huge job losses at Fairfax, News Corp, and Huffington Post Australia. Bigger media players like Network 10 haven’t come out unscathed either – after haemorrhaging cash, the television network went into administration and was bought at a distressed price by CBS last year.
Professor Caron Beaton-Wells, Director of the Global Competition and Consumer Law program at the University of Melbourne, explains that unlike some other ACCC activity, this isn’t an investigation into a potential breach of the law, nor does it necessarily foreshadow enforcement action. According to Professor Beaton-Wells, this inquiry means “the ACCC can take a deep dive into a sector and really understand how it's working.” She adds, the ACCC can “put the industry on notice – that it's watching – and provide a framework for future action if that's necessary.”
The inquiry into digital platforms “is important because of its subject matter,” says Professor Beaton-Wells. She states, “Digital platforms are playing an increasingly central role in every aspect of our social and economic life. Online platforms are obviously very beneficial in many ways, but they also raise some concerns and hence the need for an inquiry of this nature.” Further elaborating, “There are concerns on the competition side, but they're not the only concerns of course. There are concerns for privacy, there are concerns for cybersecurity, and some even argue there are concerns for democracy.”
This is new territory
While the ACCC has investigated certain digital platforms in the past, such as potential breaches of the competition law specifically as it related to price setting on some travel and hotel booking sites, Professor Beaton-Wells explains this inquiry is “still fairly greenfields and as is often the case, government policy and the law are playing catch up with developments in the marketplace.”
Authorities in different parts of the world are responding quite differently to the challenges of a digital economy. According to an ABC report, Spain has imposed an intellectual property law that charges news aggregators for republishing headlines or showing snippets of news stories. And a Reuters news story states that Israel has taken steps towards making sure internet giants aren’t stifling competition when it comes to taking the lion’s share of advertising revenue through Israel's antitrust regulator. South Africa’s competition watchdog has just referred 28 media companies to the country’s specialist tribunal, accusing them of a longstanding industry benchmarking practice of fixing advertising discounts.
Professor Beaton-Wells expands on these developments pointing out that “there are differences in the philosophical positions that authorities have about the role governments should play in markets.” She says, “In the US for instance, authorities are taking a much more cautious, wait-and-see stance in relation to policy and the law as it affects digital platforms and high tech. Whereas in Europe, the European Commission particularly has staked an early claim for the mantle of the most interventionist and taking an 'act before it's too late' approach.” She adds, “Probably the high watermark so far was its (the European Commission’s) €2.4 billion fine on Google for manipulating its search engine results. That fine is under appeal, but that really set a new benchmark – a new stake in the ground – for letting high tech know that at least in Europe the authorities are not only watching very carefully but are prepared to take quite severe action when they regard competition as being harmed.”
What can the ACCC do, especially if there’s misuse of power?
According to Professor Caron Beaton-Wells this inquiry will generally improve transparency and enable the ACCC to make recommendations to the government for some changes to the law or changes to regulation and policy that are affecting competition, consumers and news in the media landscape. She outlines that the ACCC will make certain findings about how relevant markets are working in the media and in the advertising space. She explains that the ACCC will “identify issues that may suggest the markets aren't working” such as or “too much concentration or barriers to entry or consumer switching behaviour.” Adding, “It will provide a range of stakeholders, particularly the government and consumers, with information about how news content is being generated and what's influencing that content.”
The ACCC has recently sought feedback from consumers, media organisations, digital platform providers, advertising agencies and advertisers as it continues its inquiry. It has invited submissions from all interested parties by the 3rd of April and it will then submit a preliminary report to the Treasurer by the 3rd of December and a final report by 3rd June next year. Professor Caron Beaton-Wells says, “Many of those submissions will come voluntarily, but of course the ACCC does have the power to compel information from relevant companies, under the Act.”
How can the UoM online Global Competition and Consumer Law program help in a time of new global economic realities?
Professor Beaton-Wells describes the online Global Competition Consumer Law (GCCL) program at the University of Melbourne as a “distinctive program developed and taught by luminaries in the field – world leading experts not just in academia, but (people who are) shaping .. enforcing (and) advising on the laws in all parts of the globe. She says GCCL graduates will “bring fresh thinking and sharp analysis to competition problems.” She adds, “They will be able to influence the strategies and the actions of the businesses, the law firms, the government agencies of which they are members, to ensure that competition laws keep up with the challenges associated with technological change and living in a digital economy.”
To find out more about the ACCC probe into tech giants in Australia listen to the podcast with Professor Caron Beaton-Wells below. And to find out more about the online Global Competition and Consumer program at the University of Melbourne, download a course guide below.