The Australian Competition and Consumer Commission's (ACCC's) ongoing Digital Platforms Inquiry will consider the impact of Digital Platforms on the state of competition in media and advertising markets.

The Inquiry will consider the impact of Digital Platforms on media content creators, advertisers and consumers. Search engines, social media and other digital content aggregation platforms (such as Apple News) are under scrutiny.

On 3 May and 11 May 2018, the ACCC published 64 submissions from industry and individuals and the responses of 280 consumers. We have reviewed submissions by several major players including Google, Facebook, FreeTV Australia (representing commercial television networks), the Media, Entertainment and Arts Alliance (MEAA) (representing employees in the information and entertainment industries), and the Office of the Australian Information Commissioner (OAIC). We expect the key battlegrounds will be:

Anti-competitive conduct

Digital platforms claim that the inevitability of continued technological innovation leads to pro-competition outcomes, promoting (not inhibiting) intense competition between advertising channels. Evolving media consumption patterns demonstrate that consumers like to use digital platforms. Digital platforms also lower barriers to entry for many content suppliers, providing a distribution channel for content providers who may not be able to access traditional media channels.

For their part, some traditional media companies claim that the largest digital platforms – Google and Facebook – are subject to minimal regulatory oversight, allowing them to misuse their market power. The misuse of market power can take many forms. For instance, digital platforms might make misleading claims to advertisers about their effectiveness. They may also dictate terms to advertisers, perhaps requiring advertisers to purchase less effective products bundled with more popular products.

Data and privacy

The OAIC notes that consumers often remain unaware of their privacy rights when using digital platforms, yet community concerns surrounding the online use of data are rising. Self-regulation is generally the preferred harm minimisation method for Google and Facebook (as we noted our post A new chapter in Facebook: from self-regulation to 'inevitable' regulation? in the wake of the Facebook-Cambridge Analytica scandal). The MEAA argues for greater regulatory protections for the use of data, and greater penalties with respect to mass data breaches.

Transparency of Digital Platform algorithms

For any digital platform, intellectual property is central to its competitive advantage and profitability. FreeTV, representing commercial television networks, has sought greater transparency surrounding the algorithms used by digital platforms.

Copyright protections

The MEAA has raised concerns about the use of material under copyright on digital platforms, proposing a mandatory levy for all use.

Local content creation and industry support

FreeTV notes that Google and Facebook earn the lion's share of advertising revenues while failing to invest in local content creation. Neither platform claims to be a content supplier; they offer targeted aggregation of content from content suppliers to consumers while reducing the barriers to entry for those suppliers.

Where to next

Given its areas of expertise, the ACCC is likely to take great interest in specific allegations of anti-competitive conduct and the protection of consumer data. Consistently with the inquiry's terms of reference, the protection of intellectual property – including digital platform algorithms and copyright in the work of content creators – and local content creation will be viewed through the prism of competition and consumer utility, rather than from an intellectual property or public interest perspective.

The ACCC will be holding public forums through May and August and is expected to release a preliminary report by the end of the year.