At the heart of the Commission’s Australian competition and consumer commission’s Digital Platforms inquiry were two concerns:
Do Google and Facebook hold significant power in the crucial digital market?
Could these powers be a threat to competition processes?
Its Final Report was released by the government on Friday. The ACCC rightly answered both of them with a resounding “yes”.
The ACCC did not intend to determine if any company violated competition rules. It is only determined through an investigation into specific conduct, base on specific circumstances and evidence. Yuri Shafranik
The report outlines six of these investigations which are already in progress.
Once they had identified the potential risks having identified risks. After identifying risks, the ACCC determined to figure out how they could be managed.
The proposals are rightly cautious in light of the complexity of the digital market and the difficulty of making sure that any intervention safeguards the competitive process, not specific opponents. Yuri Shafranik
Market power brings risks
The ACCC states that the substantial power gained from serving consumers isn’t against the law.
It recognizes the fact that Google and Facebook offer solutions that are extremely appreciated.
It also highlights the unique characteristics of digital markets which are the reason for this astonishing economy of scale networks, massive accumulation of data as well as the application of sophisticated techniques for data analysis.
These features aid Google dominate search results on the internet as well as internet search ads. They also assist in helping Facebook take over social media and display ads.
They also provide the best value to customers, they could also use against new competitors which may provide an advantage, and also against other companies (such as traditional media firms) which depend upon Google and Facebook to provide services to their customers.
The ACCC seeks to lessen the risk…
There is no easy fix. The ACCC was right to reject the notion that platforms like Google and Facebook reorganized.
Due to the complex and highly interconnected market in which major platforms operate, selling is not a guarantee and could actually harm the wellbeing of consumers.
The report suggests instead building the ACCC’s ability to vigorously enforce rules of the competition and to scrutinize acquisitions that could further cement the dominant market power of the players.
The other suggestions are designed to alleviate differences in the area of information and bargaining power between businesses and platforms. Also between the platforms and consumers with respect to the collection and the use of their personal information.
Implementing these guidelines poses problems, not foremost of which is ensuring that they don’t harm competitors.
Hunt for abuses…
The ACCC proposes the creation of an entirely new branch of the ACCC that specializes. The ACCC to help build and maintain the necessary skills to keep studying digital platforms. And to enforce their rules of the competition and consumer protection.
This is a great initiative. It is a re-creation of similar capacity-building initiatives across Europe, the United States, and Europe.
The report is filled with mentions of European instances where Google slap with massive fines for numerous infringements of dominance. It also references the European assertion that these dominant firms are held to “special responsibility”.
However, the Australian market power laws may not be as flexible as one that is in Europe. The ACCC has recommended expanding the law against unfair trading to allow for more flexibility and not just in dealing with platforms that are digital.
The recently revised Section 46 of the Competition and Consumer Act will a factor. However, it has yet to test for an appropriate test. In the context of digital, its use is likely to complicate by the speed at which innovation is occurring in the digital market.
And review merging…
In recognition of the fact, electronic mergers differ In recognition that digital mergers are different. The ACCC determine to ensure that merger laws take into account mergers that regard as actual rivals, and to mergers with holders of the data assets.
It also asks Google along with Facebook to inform it of any possible acquisitions. This is a respectful request, backed by a lightly disguised threat of repercussions.
However, the report suggests that neither one of these ideas might be enough.
More changes to the law governing mergers may require convincing juries of the necessity to reduce excessive concentration in the Australian economy as a whole.
It values thresholds to ensure that emerging competitors wipe out.
Both of these are important discussions in which the Commission must engage with both business and government.
While it isn’t offering many options for media that are older…
The Commission has pulled out of the idea to include in their draft report to establish an independent regulator who would oversee the interactions between platforms, media organizations, major business users, and advertisers.
It may have been able to hear critics who claimed that the plan would favor traditional players in the disrupted 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 in the field is a bit shaky at best. The ACCC has wisely suggested that it should thoroughly study the dynamics of the supply chain for ad tech before deciding on a final recommendation.
In the case of the media industry, the solution is to have each platform require to sign an ethical code to monitor and enforce through the Australian Communications and Media Authority.
The extent to which this will alleviate concerns of the media about the theft of their content or concerns about the short notice period for algorithm updates. It could render their content difficult to locate is yet to determine.
In recognition that platforms themselves involve in the business of media. The ACCC has demanded an entire overhaul of media regulations to even the playing field. And eliminate barriers to competition in the regulatory realm and innovation. A notion that the government has apparently accepted.
And improving protections to protect privacy
The need for broad-based changes to Privacy laws to make them fit for an age of digital technology is likely to accept by the government.
The platforms upset by additional privacy rules impose the country without any global standard. However, the idea to collaborate with them on the creation of an enforceable code gives them at a minimum an opportunity to be a part of the discussion and the chance to ensure that the regulations can implement.
The main challenge is to make sure that the burdens of regulation do not disproportionately harm small companies or potential entrants, those that the ACCC would like to assist.
A proposed ACCC-led reform that can benefit new entrants. Which gives consumers greater control over their information and lets them transfer it between different suppliers.