ACCC Digital Platforms inquiry – rein in Google’s and Facebook’s unfettered power

Digital Platforms inquiry
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The ACCC has released the Digital Platforms Inquiry with 23 strong recommendations to rein in the powers of online tech giants like Facebook and Google.

The ACCC Digital Platforms Inquiry (623-page final report here) focuses on Digital Platforms (including Facebook and Google but referring to any platform like Amazon) and its impact on consumers (privacy and you as the ultimate product), media content creators and advertisers. Forgive us for only providing an overview.

Digital Platforms inquiry

What is the Digital Platforms Inquiry?

Google and Facebook both operate multi-sided platforms. On one side, they offer services to consumers for a zero monetary price to obtain consumers’ attention and data, which they monetise. On the other side, they sell advertising opportunities to advertisers. Both companies generate most of their revenue from advertising.

GadgetGuy first reported on this in March, and it comes down to a few things. 90% of the world’s personally identifiable data (you) has been created in the past two years by tech giants ‘snooping’ on your every move. Search, shopping, location, device used and oversharing on sneaky social media by volunteering information likes, dislikes, facial and sentiment recognition etc.

More importantly, the internet and some very clever programmers have developed tools to passively track our every 24/7 moment and file it into vast data profiles to enable highly targeted advertising to be directed to us.

The ACCC states that data is collected from the user’s interaction with vast numbers of other websites and apps (websites that use Google advertising services or offer sign-in options through Google). This is then combined with the data from the owned and operated platforms, and, in Google’s case, with data collected from a user’s device (Android mobile operating system).

Digital Platforms inquiry

As a result, approximately 95% of general searches in Australia are via Google, and Google earns almost 96% of all search advertising revenue in Australia.

The Digital Platforms Inquiry found significant overlap in the issues around the product the digital platforms sell – you, your profile (data) and your privacy

For example, if Facebook or Google did not gather so much information about you, then the product (targeted advertising) would not be as attractive to advertisers and content creators. The content creators (publishers, newspapers, radio and TV) argue that they don’t collect such data and risk extinction in the face of the tech giants’ power.

Put bluntly Where Google’s and Facebook’s business users are also their competitors, there are questions about whether there is a level playing field, or whether they can give themselves advantages by favouring their own products.

Beefing up privacy laws becomes a two-edged sword

The Tech giants argue that their profiles enable better-informed consumers by cutting through the mass advertising static and offering products they need at competitive prices. The trade-off is protecting consumers privacy and offering complete data transparency. More importantly, do consumers make informed choices about how their user data is collected and used by digital platforms? Can the collected data be used in ways that harm society?

The ACCC’s view is that few consumers are fully informed of, fully understand, or effectively control, the scope of data collected and the bargain they are entering into with digital platforms when they sign up for, or use, their services. There is a substantial disconnect between how consumers think their data should be treated and how it is actually treated.

The bottom line is that consumers need to know how data is collected and have some say over how it is used.

The ACCC found, against the background of an ocean of personal data that is already public, there is now, and will be in the future, a need for continued community acceptance and trust in the handling of personal data by both governments and business.

Many digital platforms use standard-form click-wrap agreements with take-it-or-leave-it terms and bundled consents, which limit the ability of consumers to provide well-informed and freely given consent to digital platforms’ collection, use and disclosure of their valuable data.

That has to change. In doing so, it may stop some digital platforms from providing their so-called free services. The only statutory body that can make Australia-wide change is our Federal Government, and it needs to allocate significant resources to the ACCC to do it.

You can find a list of the 23 recommendations (from page 30-37) here.

“Our recommendations are comprehensive and forward-looking and deal with the many competition, consumer, privacy and news media issues we have identified throughout this Inquiry,” ACCC Chair Rod Sims said.

“Importantly, our recommendations are dynamic in that they will provide the framework and the information that governments and communities will need to address further issues as they arise. Our goal is to assist the community in staying up to date with these issues and futureproofing our enforcement, regulatory and legal frameworks.” 

The following video is 37 minutes.