The competition watchdog, the ACCC, says it has an open mind as it prepares, at the direction of the federal government, to undertake an inquiry into the market power of digital platforms, like Facebook and Google, in the Australian market.
The Australian Competition and Consumer Commission announced on Monday it had been directed by the government to undertake the inquiry which will put under the spotlight the trends and the effect of technological change on competition in media and advertising.
The ACCC, which will shortly call for public submissions. says its inquiry will look at the effect that digital search engines, social media platforms and other digital content aggregation platforms are having on that competition.
“The ACCC goes into this inquiry with an open mind to and will study how digital platforms such as Facebook and Google operate to fully understand their influence in Australia,” ACCC chairman Rod Sims said.
{loadposition peter}“We will examine whether platforms are exercising market power in commercial dealings to the detriment of consumers, media content creators and advertisers.
“The ACCC will look closely at longer-term trends and the effect of technological change on competition in media and advertising.
“We will also consider the impact of information asymmetry between digital platform providers and advertisers and consumers.”
The ACCC says advertising expenditure in print newspapers has been in decline for a number of years and its recent merger reviews have shown that most advertisers are spending less on print newspapers and finding alternative ways of reaching target audiences, including through digital media.
“As the media sector evolves, there are growing concerns that digital platforms are affecting traditional media’s ability to fund the development of content,” Sims said.
“Through our inquiry, the ACCC will look closely at the impact of digital platforms on the level of choice and quality of news and content being produced by Australian journalists.”
Sims says that by holding an inquiry under Part VIIA of the Competition and Consumer Act (2010), the ACCC can use compulsory information gathering powers and hold hearings to assess the level of competition in a market.
“We are keen to hear the views of content creators, mainstream media outlets and smaller media operators, platform providers, advertisers, journalists, consumers and small business interest groups,” Sims said.
The ACCC is expected to produce a preliminary report in early December 2018, with a final report due in early June 2019, and says it will soon distribute an issues paper outlining matters relevant to the inquiry.