Tech Titans Face ACCC Data Probe
Apple, Google and Facebook, alongside other digital giants, will be forced to divulge how they use data belonging to their consumers for personalised advertising during an 18-month inquiry by the competition watchdog.
Josh Frydenberg has instructed the Australian Competition and Consumer Commission (ACCC) to shine a light on how internet data is shared with third parties, such as advertisers, and whether the ads are providing value for money for businesses.
Tech giants will be compelled to submit ad revenue data and the prices businesses are charged to promote products on their platforms.
The inquiry gives the ACCC chairman Rod Sims power to assess how the market power of digital firms affect the supply of ad opportunities for businesses.
The Treasurer has also given the regulator a five-year inquiry into digital platforms to scrutinise anti-competitive behaviour. The first report by the watchdog will be handed down on 30 September and every six months thereafter.
Both probes are part of the Morrison government’s response to the ACCC’s initial inquiry into digital platforms that was handed down last year.
Frydenberg said regulatory framework needed to keep up with the rapid changes of media consumption driven by the internet.
‘The government recognises that there is a need for reform to better protect consumers, improve transparency, address power imbalances and ensure that substantial market power is not used to lessen competition in media and advertising services markets,’ he said.
‘With digital platforms collecting and using enormous volumes of personal information, consumers need to be properly informed about the data collected, how it is being used and by who.’
Facebook and Google, alongside other tech titans, have been subject to several antitrust investigations in the US and Europe resulting their behaviour in the market, specifically with ads, the treatment of competitors and the use of privacy data.
The companies have been fined tens of billions of dollars over breaches of competition and privacy law.
US federal regulators also announced this week they were investigating the tech giants over how they acquired smaller rivals and whether they harmed competition, compromised consumers and evaded regulatory scrutiny. The US Federal Trade Commission ordered Apple, Amazon, Google, Facebook and Microsoft to provide details as to how their firms dealt with and bought junior rivals over the past decade.
The two most recent inquiries announced by Frydenberg were recommended under the initial probe from Sims, who said there were ‘adverse effects’ on the media market because of Google and Facebook.
Sims also warned that the digital giants were distorting the ability of businesses to compete on merit in advertising, media and a range of other markets.
Problems with opaque digital ad markets, the proliferation of ‘fake news’ and consumers not being adequately informed about how their data was collected and used were also among the problems Sims identified.
The advertising tech inquiry will be finalised by August 2021, with an interim report to be released by the end of this year.
The probes will be directed by the ACCC’s new digital platforms branch that was provided $26.9 million in funding last December.