Consumer watchdog given new powers to crack down on Google and Facebook

Sarah Martin and Paul Karp
Photograph: Reuters File Photo/Reuters

The prime minister, Scott Morrison, has announced a crackdown on Google and Facebook, agreeing to new powers and funding for the consumer watchdog to monitor the digital giants.

Responding to the the Australian Competition and Consumer Commission’s 18-month inquiry into the impact of Google, Facebook and other digital platforms on Australia’s media landscape, Morrison said the changes would “modernise” the regulations that apply online.

“I want us to be the model jurisdiction in the world for how we are dealing with digital platforms and social media platforms and I have a simple rule: the rules that exist in the real world need to exist in the digital world,” Morrison said.

“If it is the wrong thing to do in the real world, it is the wrong thing to do in the digital world.”

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Under the changes announced by the Coalition on Thursday, the government will establish a dedicated unit within the ACCC to monitor and report on the state of competition and consumer protection in digital platform markets.

The unit’s first task, which will be underpinned by $27m in new funding, will examine online advertising and ad-tech services that determine how consumers are targeted through the use of data.

The ACCC’s final report made 23 recommendations to force more regulation on Google and Facebook aimed at improving media competition, including enabling the new expert division to examine the advertising products and algorithms used to target users in news feeds and in search results.

The government has also put the digital companies “on notice” that they will face a mandatory code of conduct if digital platforms and media businesses are unable to agree to a voluntary code of conduct to address bargaining power imbalances.

Morrison said a “mandatory code will happen” if a voluntary code was not agreed to by November 2020.

The code will cover how advertising revenue is shared, how media content is accessed and presented, and will ensure that media businesses are given forewarning about changes to algorithms that determine how content is ranked online.

The Coalition has also announced a staged process beginning next year that will reform media regulation to ensure a level playing field between online and traditional media players.

A review of privacy laws will also be undertaken to ensure ensuring privacy settings “empower consumers, protect their data and best serve the Australian economy”.

Morrison said the review followed the government’s commitment in the 2019-20 budget to increase penalties and introduce a binding online privacy code.

The final report made 23 recommendations to force more regulation on Google and Facebook, and to improve media competition, with the government agreeing to support or support in principle 17 of these.

Communications minister Paul Fletcher said the government had agreed to a review of Australian content obligations on free-to-air television and would consider whether similar obligations should apply to subscription services such as Netflix.

It will also look at policies around supporting Australian film and television.

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The government said that while a number of the ACCC’s recommendations will be progressed “immediately”, several will need further consideration and engagement “given the complexity of the issues and the potential to have economy-wide effects”.

Morrison said the changes were aimed at achieving the “twin outcomes” of ensuring protections while also “supercharging” the digital economy.

“We have to deal with the challenges it presents and the opportunities that are there for us to take,” he said.

In a statement the Digital Industry Group Inc – an industry advocacy body which represents members including Google, Facebook and Twitter – said it welcomed the economy-wide review of the Privacy Act.

The managing director, Sunita Bose, said while DIGI supports “efforts to modernise relevant media laws for a digital era” it will study the proposals to ensure there are “no unintended consequences for Australia’s digital future, economic growth and global competitiveness”.

The Communications Alliance, the peak telecommunications industry body in Australia, also welcomed the review.

Its chief executive John Stanton said any overhaul of the Privacy Act must “be underpinned by a full analysis of the economy-wide impact of proposed reforms, not just the impact on digital platforms”.

“We are also pleased to see that the government has resisted the ACCC’s calls for immediate reform to the Australian consumer law and a mandatory take-down code to assist copyright enforcement.”