In December 2017 the Federal Government asked the ACCC to investigate Google and Facebook power in the Australian media landscape.
That was before the Facebook scandal – else the terms of reference may have been far wider
The ACCC ‘Digital Platforms inquiry’ is looking at the impact that digital search engines, social media platforms and other digital content aggregation platforms are having on competition in media and advertising services markets.
“The ACCC goes into this inquiry with an open mind too and will study how digital platforms such as Google and Facebook operate to fully understand their influence in Australia,” ACCC chairman Rod Sims said at the time.
The inquiry findings are due for release mid-next year. The inquiry process has been interesting.
Google made its response public – a good move
Google’s 14-page response focused on its search engine driving more than 2 billion visits to Australian news websites. It also connected 840,000 Australian businesses with consumers for ‘free’.
It contends that the internet has changed the face of media. Online advertising has become a vibrant, competitive part of the advertising industry.
“Online advertising shows continuous innovation, investment, and new entrants. Today offers businesses of all sizes a wide breadth of advertising options. There are numerous ad formats, including text, display, mobile, and video. These ads can be matched more effectively with consumers, providing businesses of all sizes with opportunities for more relevant, cost-effective and efficient advertising.”
These developments have also required traditional media content creators to rethink their revenue models. For example, the Internet encouraged the establishment and growth of successful new online businesses. These now compete with traditional media content creators for advertisers in areas such as classifieds, cars, and real estate.
To succinctly summarise Google’s case – traditional media was caught sleeping. Advertising revenue to subsidise journalists to write news is as dead as a dodo. Google has done nothing more than predict and stay ahead of the curve.
The response is even and largely unbiased – it is a good read. Basically once the genie is let out of the bottle it is impossible to put it back so work with it. Between the lines what it comes down to is the enormous level of trust we place in Google.
Facebook did not – a bad move
Facebook’s 59-page submission accompanied by a 23-page report from the Queensland University of Technology, was a little blunter.
“Just like newspapers, we rely on Advertising. The reason we have chosen the ad-supported model is because it is the only one that will work to connect the entire world. Advertising is Facebook’s primary source of revenue. In 2017, it accounted for 98% of our revenue. Our goal is to be the best dollar and the best minute our advertisers spend.”
Who is to blame them if they do it better although the submission carefully avoided the Cambridge Analytics brouhaha.
On that note, Acting Information Commissioner Angelene Falk said the “formal investigation” would consider whether Facebook had breached the Privacy Act, which requires companies to take reasonable steps to keep their users’ data secure.