Back in the 1990s – a lifetime ago in internet terms – the Spanish sociologist Manuel Castells published several books charting the rise of information networks. He predicted that in the networked age, more value would accrue in controlling flows of information than in controlling the content itself.
In other words, those who positioned themselves as network hubs – the routers and switchers of information – would become the gatekeepers of power in the digital age.
With the rise of internet juggernauts Google, Facebook, Amazon and others, this insight seems obvious now. But over the past two decades, a fundamentally new business model emerged which even Castells had not foreseen – one in which attracting users onto digital platforms takes precedence over everything else, including what the user might say, do, or buy on that platform.
Gathering information became the dominant imperative for tech giants – aided willingly by users charmed first by novelty, then by the convenience and self-expression afforded by being online. The result was an explosion of information, which online behemoths can collate and use for profit.
The sheer scale of this enterprise means that much of it is invisible to the everyday user. The big platforms are now so complex that their inner workings have become opaque even to their engineers and administrators. If the system is now so huge that not even those working within it can see the entire picture, then what hope do regulators or the public have?
Of course, governments are trying to fight back. The GDPR laws in Europe, the ACCC Digital Platforms report in Australia, and the DETOUR Act introduced to the US Congress in April – all are significant attempts to claw back some agency. At the same time, it is dawning on societies everywhere that these efforts, while crucial, are not enough.
Gatekeepers reign supreme
If you think of the internet as a gigantic machine for sharing and copying information, then it becomes clear that the systems for sorting that information are vitally important. Think not just of Google’s search tool, but also of the way Google and Amazon dominate cloud computing – the largely invisible systems that make the internet usable.
Over time, these platforms have achieved greater and greater control over how information flows through them. But it is an unfamiliar type of control, increasingly involving autonomous, self-teaching systems that are increasingly inscrutable to humans.
Information gatekeeping is paramount, which is why platforms such as Google, Amazon and Facebook have risen to supremacy. But that doesn’t mean these platforms necessarily need to compete or collude with one another. The internet is truly enormous, a fact that has allowed each platform to become emperor of a growing niche: Google for search, Facebook for social, Amazon for retail, and so on. In each domain, they played the role of incumbent, disruptor, and innovator, all at the same time.
Now nobody competes with them. Whether you’re an individual, business, or government, if you need the internet, you need their services. The juggernauts of the networked age are structural.
Algorithms are running the show
For these platforms to stay on top, innovation is a constant requirement. As the job of sorting grows ever larger and more complex, we’re seeing the development of algorithms so advanced that their human creators have lost the capacity to understand their inner workings. And if the output satisfies the task at hand, the inner workings of the system are considered of minor importance.
Meanwhile, the litany of adverse effects are undeniable. This brave new machine-led world is eroding our capacity to identify, locate, and trust authoritative information, in favour of speed.
It’s true that the patient was already unwell; societies have been hollowed out by three decades of market fundamentalism. But as American tech historian George Dyson recently warned, self-replicating code is now out there in the cyber ecosystem. What began as a way for humans to coax others into desired behaviours now threatens to morph into nothing less than the manipulation of humans by machines.
The digital age has spurred enormous growth in research disciplines such as social psychology, behavioural economics, and neuroscience. They have yielded staggering insights into human cognition and behaviour, with potential uses that are far from benign.
Even if this effort had been founded with the best of intentions, accidents abound when fallible humans intervene in complex systems with fledgling ethical and legal underpinnings. Throw malign intentions into the mix – election interference, information warfare, online extremism – and the challenges only mount.
If you’re still thinking about digital technologies as tools – implying that you, the user, are in full control – you need to think again. The truth is that no one truly knows where self-replicating digital code will take us. You are the feedback, not the instruction.
Regulators don’t know where to start
A consensus is growing that regulatory intervention is urgently required to stave off further social disruption, and to bring democratic and legal oversight into the practices of the world’s largest monopolies. But, if Dyson is correct, the genie is already out of the bottle.
Entranced by the novelty and convenience of life online, we have unwittingly allowed silicon valley to pull off a “coup from above”. It is long past time that the ideology that informed this coup, and is now governing so much everyday human activity, is exposed to scrutiny.
The challenges of the digital information age extend beyond monopolies and privacy. This regime of technologies was built by design without concerns about exploitation. Those vulnerabilities are extensive and will continue to be abused, and now that this tech is so intimately a part of daily life, its remediation should be pursued without fear or favour.
Yet legislative and regulatory intervention can only be effective if industry, governments and civil society combine to build, by design, a digital information age worthy of the name, which doesn’t leave us all open to exploitation.
Australia’s consumer watchdog has recommended major changes to our consumer protection and privacy laws. If these reforms are adopted, consumers will have much more say about how we deal with Google, Facebook, and other businesses.
The proposals include a right to request erasure of our information; choices about whether we are tracked online and offline; potential penalties of A$10 million or more for companies that misuse our information or impose unfair privacy terms; and default settings that favour privacy.
The report from the Australian Competition and Consumer Commission (ACCC) says consumers have growing concerns about the often invisible ways companies track us and disclose our information to third parties. At the same time, many consumers find privacy policies almost impossible to understand and feel they have no choice but to accept.
My latest research paper details how companies that trade in our personal data have incentives to conceal their true practices, so they can use vast quantities of data about us for profit without pushback from consumers. This can preserve companies’ market power, cause harm to consumers, and make it harder for other companies to compete on improved privacy.
Privacy policies are broken
The ACCC report points out that privacy policies tend to be long, complex, hard to navigate, and often create obstacles to opting out of intrusive practices. Many of them are not informing consumers about what actually happens to their information or providing real choices.
Many consumers are unaware, for example, that Facebook can track their activity online when they are logged out, or even if they are not a Facebook user.
Some privacy policies are outright misleading. Last month, the US Federal Trade Commission settled with Facebook on a US$5 billion fine as a penalty for repeatedly misleading users about the fact that personal information could be accessed by third-party apps without the user’s consent, if a user’s Facebook “friend” gave consent.
If this fine sounds large, bear in mind that Facebook’s share price went up after the FTC approved the settlement.
The ACCC is now investigating privacy representations by Google and Facebook under the Australian Consumer Law, and has taken action against the medical appointment booking app Health Engine for allegedly misleading patients while it was selling their information to insurance brokers.
Nothing to hide…?
Consumers generally have very little idea about what information about them is actually collected online or disclosed to other companies, and how that can work to their disadvantage.
A recent report by the Consumer Policy Research Centre explained how companies most of us have never heard of – data aggregators, data brokers, data analysts, and so on – are trading in our personal information. These companies often collect thousands of data points on individuals from various companies we deal with, and use them to provide information about us to companies and political parties.
Data companies have sorted consumers into lists on the basis of sensitive details about their lifestyles, personal politics and even medical conditions, as revealed by reports by the ACCC and the US Federal Trade Commission. Say you’re a keen jogger, worried about your cholesterol, with broadly progressive political views and a particular interest in climate change – data companies know all this about you and much more besides.
So what, you might ask. If you’ve nothing to hide, you’ve nothing to lose, right? Not so. The more our personal information is collected, stored and disclosed to new parties, the more our risk of harm increases.
Potential harms include fraud and identity theft (suffered by 1 in 10 Australians); being charged higher retail prices, insurance premiums or interest rates on the basis of our online behaviour; and having our information combined with information from other sources to reveal intimate details about our health, financial status, relationships, political views, and even sexual activity.
In written testimony to the US House of Representatives, legal scholar Frank Pasquale explained that data brokers have created lists of sexual assault victims, people with sexually transmitted diseases, Alzheimer’s, dementia, AIDS, sexual impotence or depression. There are also lists of “impulse buyers”, and lists of people who are known to be susceptible to particular types of advertising.
Major upgrades to Australian privacy laws
According to the ACCC, Australia’s privacy law is not protecting us from these harms, and falls well behind privacy protections consumers enjoy in comparable countries in the European Union, for example. This is bad for business too, because weak privacy protection undermines consumer trust.
Importantly, the ACCC’s proposed changes wouldn’t just apply to Google and Facebook, but to all companies governed by the Privacy Act, including retail and airline loyalty rewards schemes, media companies, and online marketplaces such as Amazon and eBay.
Australia’s privacy legislation (and most privacy policies) only protect our “personal information”. The ACCC says the definition of “personal information” needs to be clarified to include technical data like our IP addresses and device identifiers, which can be far more accurate in identifying us than our names or contact details.
Whereas some companies currently keep our information for long periods, the ACCC says we should have a right to request erasure to limit the risks of harm, including from major data breaches and reidentification of anonymised data.
Companies should stop pre-ticking boxes in favour of intrusive practices such as location tracking and profiling. Default settings should favour privacy.
Currently, there is no law against “serious invasions of privacy” in Australia, and the Privacy Act gives individuals no direct right of action. According to the ACCC, this should change. It also supports plans to increase maximum corporate penalties under the Privacy Act from A$2.1 million to A$10 million (or 10% of turnover or three times the benefit, whichever is larger).
Increased deterrence from consumer protection laws
Our unfair contract terms law could be used to attack unfair terms imposed by privacy policies. The problem is, currently, this only means we can draw a line through unfair terms. The law should be amended to make unfair terms illegal and impose potential fines of A$10 million or more.
So far, the government has acknowledged that reforms are needed but has not committed to making the recommended changes. The government’s 12-week consultation period on the recommendations ends on October 24, with submissions due by September 12.
Earlier this year, a new app was launched in China to put the patriotism of Chinese citizens to the test.
Named “Study Xi to Strengthen the Nation”, the app quizzes users on all things related to President Xi Jinping – his policies, activities, achievements, theories and thoughts. Users can earn points and win prizes for correct answers and compete with colleagues and friends to see who knows the most about China’s leader.
The app is the latest example of a rethink by the Communist Party when it comes to its propaganda efforts and how best to justify the legitimacy of its one-party rule, extol the virtues of the party, and promote patriotism to an audience of young, tech-savvy Chinese.
For those institutions responsible for the production of effective propaganda, this is a real challenge. After all, propaganda in the 21st century has to go beyond forcing people to sit in study sessions on Friday afternoons, read the People’s Daily newspaper, or watch China Central Television (CCTV) in group meetings.
From sermons to ‘indoctritainment’
Thanks to a number of developments, the old propaganda messages of previous generations can easily be repackaged for millennials. Like the rest of the world, Chinese millennials are keen adopters of the latest mobile technologies and suffer from short attention spans. They are also just as enthusiastic as their Western counterparts about posting jokes, music videos and short, sharp, attention-grabbing memes on social media.
The Chinese government, meanwhile, is putting more of an emphasis on humanising its approach to leadership. Politicians are keen to be seen as relatable rather than authoritative figures.
So, to get its messaging across in a new way, party propaganda has morphed from dry sermons to what I like to call indoctritainment. And these campaigns are often high-end productions.
Increasingly, ideological messages are more effective if they are delivered using a platform that’s already been trialled and proven in marketing. In 2016, for instance, CCTV launched a promotion of the Communist Party in the form of a public awareness advertisement to mark the 95th anniversary of the founding of the party.
The one-minute video, titled “I am a Chinese Communist Party member,” features heartwarming vignettes of individuals from different walks of life – teacher, cleaner, surgeon, policeman, local public servant, fisherman – who are all good Samaritans doing their bit to help others.
The message is clear: the party is being re-branded as an organisation made up of unsung heroes. As the voice-over explains:
I am the first one to arrive, I am the last one to leave, I’m the one who thinks of myself the least, and cares about others the most … I am the Chinese Communist Party, and I am always there with you.
Another video promoting the Chinese military, “I am a Chinese soldier”, demonstrates the point. Even without the English subtitles, it’s not hard to see what the producers were going for: a patriotic Hollywood movie or romantic tear-jerker.
The pop culture treatment, with American accents
Another tactic is the use of popular culture as a way of conveying sometimes dense or dull Chinese government policies, especially if the intended audience is global.
In 2015, a video called “The 13 what” used catchy pop music, colourful animation, and American-accented English to explain China’s 13th five-year national plan.
Channelling David Bowie, Monty Python and the psychedelia of the 1960s, the three-minute video was produced by a digital media production team operating under the auspices of the government’s main propaganda offices in Beijing.
Two years earlier, the same studio also produced the widely circulated five-minute video clip, “How leaders are made”. Xi Jinping appears in the clip as a cartoon character, as do US President Barack Obama and British Prime Minister David Cameron.
Light-hearted, zany, and (again) featuring American English, the video informs viewers that Xi has worked long and hard to move up China’s political ladder. The implication is that Xi’s power is just as legitimate as that of his Western counterparts.
Within a short period after its release, the video had been viewed more than a million times on Youku, China’s version of YouTube.
Propaganda by way of screen bullets
Increasingly, the Communist Party’s propaganda material goes viral only after it appears on popular video-sharing websites with “bullet screens”. This is an interactive feature that enables viewers to “shoot” text comments across the screen as the video is being streamed. It’s very popular with younger audiences.
One of China’s biggest bullet screen platforms is Bilibili, often referred to as “the B site”.
The site used to be occasionally shut down for streaming what the government considers “morally unsound” material.
To stay on the party’s good side, Bilibili now plays host to a wide suite of propaganda produced by CCTV or the Chinese Department of Propaganda. In 2015, the Communist Youth League of China also began to hold regular courses on the site aimed at promoting patriotism among young people.
But how effective is it?
Just how successful these strategies have been is still not entirely clear. While the “Xi Jinping thought” app has captured the imagination of many outside China, party members who have been encouraged – in some cases requested – to download the app seem less than enthusiastic.
And some of these new propaganda efforts have backfired and attracted cynical responses online, even ridicule.
But judging by the many comments viewers have left on the B site, it seems fair to conclude that some of the tactics have had the intended effect of endearing the party and its leaders to the young and impressionable.
This is a reminder of how naïve it is to assume that technologies are inherently democratising, and that digital disruption is likely to spell the end of communism in China. Such assumptions still permeate most Western media stories about the Communist Party’s new propaganda strategies, but this is clearly not the case.
As the party’s propaganda strategies become more nuanced and sophisticated, so should our frameworks for understanding them.
It was bound to happen, and it did. Poorly crafted legislation – designed to allow national security agencies to collect information with the aim of protecting Australians from terrorists – is now reportedly being exploited by a range of different government agencies for other purposes.
It has been widely reported that the Veterinary Surgeons Board of WA, Victorian Fisheries, Liverpool City Council, and the Australian Sports Anti-Doping Authority are among the entities that have requested access to metadata.
Under the Telecommunications (Interception and Access) Act 1979, only agencies tasked with enforcing criminal law are entitled to access metadata from telecommunications companies.
Metadata is the information recorded by the telco when you make a call or use the internet. It can include information such as where you are, whom you called or texted, how long you talked for, how frequently you called or texted someone, what services you used, what websites you visited and when, and much more besides.
Under the legislation there are 22 criminal law enforcement agencies that can legally access these metadata. They include the federal police, state police forces, the Australian Criminal Intelligence Commission, federal and state police integrity commissions, state anti-corruption bodies, and parts of the Australian Border Force.
The federal home affairs minister also has the power to declare other agencies as “enforcement agencies” under the law.
Why is data being accessed?
Generally, enforcement agencies are entitled to access metadata if it is either given to them voluntarily, or if they issue a formal request for information they believe is required to perform their duty.
The definition of an enforcement agency was narrowed in 2015, at the same time the federal government introduced the controversial mandatory data retention framework, which requires telcos to retain customers’ metadata for at least two years.
Before the definition was tightened, an estimated 80 different agencies were covered by the previous laws. They included not just criminal and national security investigators, but also a wide range of agencies pursuing financial matters such as unpaid fines or taxes.
Since 2015, however, most of those agencies found themselves excluded by the new definition of an enforcement agency, but could use a range of laws that still grant powers to request metadata directly. One example is Section 20 of the New South Wales Fair Trading Act 1987. According to the submission made by the Australian Communications Alliance to the Parliamentary Joint Committee on Intelligence and Security, 60 federal and state agencies have sought access to metadata via this mechanism.
What is metadata anyway?
The information contained in metadata was infamously described by former Attorney-General George Brandis as the “material on the front of the envelope” (rather than the contents of the letter itself). But in reality it is much, much more.
Of course, metadata can be useful to help telcos improve their services, by revealing peak calling times or popular locations on the network. But you can also think of metadata as a digital breadcrumb trail that each of us leaves in our wake as we go about our lives.
It can provide enough information to establish a detailed picture of someone’s life: their daily routine, relationships, interests, preferences, and behaviour. It can even reveal someone’s location, to whom they have spoken, and for how long.
It seems excessive that two years’ worth of someone’s metadata can be kept on file and then obtained without a warrant. Although the low access threshold was called out in submissions before the law was passed, there was no public discussion of the implications for privacy and liberty.
If properly understood, the metadata access regime would not pass the pub test.
How is metadata really being used?
The federal home affairs department’s 2017-18 annual report lists a range of offences for which metadata has been sought by various agencies.
The report says that information was sought in relation to a total of 23,586 criminal offences including homicides, abductions, sexual assaults, fraud, robbery and drug offences.
The report also reveals that 300,781 items of metadata were disclosed during the reporting period in total across all categories.
Law enforcement agencies have claimed that metadata helps to eliminate suspects by revealing their networks and contacts. But there is no information regarding the use of metadata by government bodies that are not officially enforcement agencies within the meaning of the data retention laws.
In simple terms, there is no central public report that outlines how all state and federal agencies are accessing and using this information.
Metadata stored is available to any enforcement body with the power (under state or federal law) to request or require the information. By tightening its definition of “enforcement agencies” in 2015, the federal government denied many smaller agencies the right to access metadata directly, but did not prevent them from getting it via other means. As a consequence they were also excluded from supervision by the Commonwealth Ombudsman.
One interesting exception is that civil courts are prevented from obtaining metadata as evidence in civil proceedings, unless the metadata was collected and held by the telco for some purpose other than the mandatory data retention regime. Given the huge range of other authorities that can access it, this seems rather arbitrary and unfair.
So where to from here? Besides amending the law, it is also time for a wider public debate over the correct balance between our privacy and civil liberty on one hand, and our protection and national security on the other. This is especially important as we become more and more reliant on digital technology to live and work. Just imagine the privacy implications with 5G, when more personal devices are connected to the internet like your smart meter, light bulbs and toaster.
This article was coauthored by Patrick Fair, Chairman of the Communications Reference Panel, Communications Alliance.
Hype continues to surround the roll-out of 5G technology in Australia and across the world.
While there is promise of faster network speeds, and talk of exciting technologies like driverless cars, there’s also a growing movement to stop the implementation of 5G due to concerns about the effects it may have on our health.
But the scientific evidence we’ve got assures us there’s no reason to worry. The radio frequencies powering 5G will be well below the exposure limits known to cause harm.
What is 5G and how does it work?
5G is the 5th generation of mobile phone technology. All generations of mobile phones work using what’s called electromagnetic energy. The specific type of electromagnetic energy used by mobile phones is known as radiofrequency, sometimes called radio waves.
This type of radiation is non-ionising, so it doesn’t damage our DNA like ionising radiation can, such as that from the sun or x-rays. Ionising means there’s enough energy to remove electrons from the atoms they are attached to. This makes them unstable and is something non-ionising radiation, such as that used by mobile phones, lacks the power to do.
Initially, 5G will use the same type of radio waves as used in 4G. But in the future it will operate at higher frequencies. Higher frequencies allow for faster connections and response times, while also increasing capacity for more users to be connected.
The higher the frequency, the shorter the distance the radio waves travel. As the 5G frequencies will be higher than those used by previous mobile phone technologies, a lot more mobile phone base stations will be required.
Much of the public concern has centred around these two new elements – that the frequencies used will be higher, and that there will be more mobile phone base stations. While some people believe these two factors alone will lead to higher exposures, the reality is actually very different.
Can you be allergic to your Wi-Fi?
Higher frequencies don’t travel as far, meaning exposure is not as deep as previous generation technologies. This results in more superﬁcial exposures which are mostly absorbed by the skin rather than deeper in the body.
The idea that more base stations lead to higher exposures is also a common misconception. A larger number of base stations will actually provide a more efficient network. This means mobile phones can operate at a reduced power, which is likely to result in reduced overall personal exposure.
Research and regulation
Importantly, we have no evidence of any established health effects from the exposures related to mobile phones, despite extensive research. This consensus has been reiterated by independent international expert bodies.
We know a lot about how radiofrequency interacts with the human body. Health effects occur from exposure when there is a large rise in body temperature. But this will only be seen at power levels far higher than those used in telecommunications, like from a microwave oven.
Exposures from mobile phones and their base stations are tightly regulated. In Australia, safety standards are set by the Australian Radiation Protection and Nuclear Safety Agency (ARPANSA).
These standards are based on the current scientific evidence. They also cover the new frequencies that will be used by 5G. Importantly, the safety limits are set well below levels known to cause harm. And although technology can legally run at the safety limit, in reality, exposures are typically hundreds of times below these safety limits.
There is a lot of misinformation out there regarding 5G, and the electromagnetic energy associated with telecommunications more generally. While there’s no evidence of harm from such electromagnetic energy, there is evidence fear and anxiety can be harmful to our health and overall well-being.
While anti-5G sentiment and campaigning might be well-intentioned, without the scientific evidence to back these sentiments, it’s likely doing more harm than good. The challenge we now face is counteracting the misinformation out there.
Central to the Australian Competition and Consumer Commission’s Digital Platforms inquiry were two questions:
do Google and Facebook hold substantial power in crucial digital markets?
does this power pose a risk to competitive processes?
In its Final Report released by the government on Friday, the ACCC correctly answered both with a resounding “yes”.
The ACCC did not set out to determine whether either company has broken the competition rules. That can only be determined in an investigation of specific conduct based on specific facts and evidence.
The report itemises six such investigations already underway.
Having identified risks, the ACCC did set out to determine how they might be contained.
Its proposals are rightly cautious, reflecting the complexities of digital markets and the challenges in ensuring that any intervention protects the competitive process rather than individual competitors.
With market power comes dangers
The ACCC points out that substantial power won by serving consumers is not against the law.
It acknowledges that Google and Facebook provide services that are highly valued.
And it emphasises the distinctive features of digital markets that contribute to this power: extraordinary economies of scale, network effects, massive accumulations of data and the use of highly sophisticated data analytic techniques.
These features help Google dominate internet search and internet search advertising and help Facebook dominate social networks and display advertising.
While they also help deliver value for consumers, they can be used against new entrants that may offer a better deal and against other businesses (such as traditional media companies) that have come to rely on Google and Facebook to deliver services to customers.
The ACCC wants to reduce the risks…
There are no quick fixes. The ACCC rightly rejected the idea that platforms such as Google and Facebook be broken up.
Given the highly interconnected complex nature of the markets in which the major platforms participate, divestiture would not guarantee, and might in fact harm, consumer welfare.
The report recommends instead building up the ACCC’s capacity to aggressively enforce the competition rules and to review acquisitions that would further entrench the dominant players’ market power.
Many of the other recommendations are designed to ameliorate imbalances in information and bargaining power between the platforms and business users, and between the platforms and consumers in relation to the collection and use of their personal data.
Implementing these recommendations presents challenges, not the least of which is to ensure they don’t themselves damage competition.
…hunt out abuses…
The ACCC proposes the establishment of a new specialist branch within the ACCC to build and sustain the skills needed to continue studying digital platforms and enforcing their competition and consumer rules.
The report is peppered with references to European cases in which Google has been subject to thundering fines for various abuses of dominance. It also invokes the European mantra that these powerful companies have “special responsibility”.
But the Australian misuse of market power prohibition may not be flexible as the one in Europe. The ACCC has recommended broadening the unfair trading law in order to allow it more flexibility, and not only for use in dealing with digital platforms.
The recently amended section 46 of the Competition and Consumer Act will play a role, but it is yet to be taken for a proper run and, in the digital context, its application will be complicated by the rapid pace of innovation in digital markets.
…and scrutinise mergers…
In an acknowledgement that digital mergers are different, the ACCC wants to ensure the merger laws pay attention to mergers with potential as well as actual competitors, and to mergers with the owners of data assets.
It also wants Google and Facebook to voluntarily notify it of any future acquisitions. This is a polite request backed by a thinly veiled threat of repercussions.
But the report also implies that neither of these proposals may be enough.
Still more changes to the merger law might be needed to persuade judges of the need to stem unhealthy concentration in the Australian economy generally.
Australia almost certainly needs a compulsory notification regime, triggered by a combination of turnover and transaction value thresholds to ensure nascent competitors are not snuffed out.
Both of these are bigger conversations that the Commission needs to engage government and business in.
…while not offering much for legacy media…
The Commission has stepped away from a proposal in its preliminary report that there be a special regulator to oversee the relationships between platforms and media organisations, significant business users and advertisers.
It might have listened to criticism that the proposal would benefit traditional players in disrupted industries more than it benefits consumers.
The advertising industry is highly fragmented, complex and constantly changing. The evidence that the new platforms are distorting competition in the industry is questionable at best. The ACCC has sensibly suggested it needs to thoroughly examine dynamics in the ad tech supply chain before firming up any recommendation.
For the media industry, the compromise is that each platform be required to negotiate a code of conduct to be overseen and enforced by the Australian Communications and Media Authority.
Whether this will address media concerns about the appropriation of their content and about short notice periods for algorithm changes that can make their products hard to find remains to be seen.
But, recognising that the platforms are themselves knee-deep in the media business, the ACCC has called for a wholesale overhaul of media regulation to level the playing field and remove regulatory impediments to competition, an idea the government seems to have accepted.
…and upgrading protections for privacy
The call for broad ranging reform of our privacy laws to wrench them into the digital age is also likely to be accepted by government.
The platforms might grumble at additional privacy requirements imposed country by country without an international standard, but the proposal to work with them on the development of an enforceable code at least allows them a seat at the table, and a chance to ensure the regulations are workable.
The challenge will be to ensure that the regulatory burdens don’t disproportionately hurt small businesses and prospective entrants, the ones the ACCC wants to help.
An imminent ACCC-led reform that will help both new entrants and consumers is the Consumer Data Right, which will give consumers more control of their data and enable them to move it between suppliers.
The ACCC’s work on digital platforms has just begun and there is a long and bumpy road ahead. The government should give it the time and money it will need to get on with it.
Caron Beaton-Wells is host of the Competition Lore podcast, exploring competition policy and law in a digital age.
Living with two preteens, I get almost daily requests to approve new apps. My standard response is to ask my kids to describe the app, why they want it, and how it makes money.
The last question is important, and not just to avoid to avoid in-app charges. Understanding the forces that drive the online economy is crucial for consumers, and increasingly citizens. All the new tools we access come at a cost even when they seem to be free.
How technology companies make money is a good question for digital media users of any age. It lies at the heart of the Australian Competition and Consumer Commission’s inquiry into the power and profits of Google and Facebook, the world’s two most ubiquitous digital platforms.
The competition watchdog’s job was to look at how online search engines, social media and digital content aggregators wield power in media and advertising, how that undermines the viability of traditional journalism (print in particular), and what can be done about it.
Its final report makes a swag of recommendations to limit these platforms’ market dominance and use of personal data.
One example is requiring devices to offer consumers a choice of search engine and default browsers. Google now requires Android phones to pre-install Google apps. This feeds a “default bias” that contributes to it being used for 95% of Australian searches.
Another is reforming Australia’s privacy laws to address the digital environment. Platforms’ “take it or leave it” policies now give consumers little choice on having their data harvested.
But on the area of concern central to the inquiry’s establishment –
the decline in journalism – the recommendations are relatively minor:
- a code of conduct to treat news media businesses “fairly, reasonably and transparently”
- “stable and adequate” government funding for the ABC and SBS
- government grants (A$50 million a year) to support original local journalism
- tax incentives to encourage philanthropic support for journalism.
The reality is that there is little governments can do to reverse the technological disruption of the journalism business.
The internet has made stark that news organisations aren’t primarily in the journalism business. The stories they produce play an incomparable social role, but the business model is to deliver an audience to advertisers.
Social media and search give advertisers better tools to target messages to more precise groups of potential consumers. It is a phenomenally better mousetrap.
Traditional advertising is expensive and inefficient. An advertiser pays to reach a broad audience, most with no interest in what is being advertised.
Search allows advertisers to pay to reach people precisely when they are looking for something. Google knows what you are interested in, and serves up advertising accordingly. In the last quarter alone advertising in its properties (Search, Maps, Gmail, YouTube, Play Store and Shopping) made US$27.3 billion in revenue.
Social media platforms have a different model, but one no less damaging to the old newspaper business model. It’s a bit more like traditional mass media advertising, selling the attention of users to advertisers, but in a far more targeted way.
To the extent Facebook, Instagram, Twitter and so on capture your attention, and effectively monetise content made by others through sharing, they also undercut traditional news businesses.
Follow the money
No regulation can fix this. As the competition watchdog’s report notes, Australian law does not prohibit a company from having substantial market power. Nor does it prohibit a company “from ‘out-competing’ its rivals by using superior skills and efficiency”.
No one – not even the tech companies – is necessarily to blame for the technological innovation that has disrupted traditional news organisations.
To see that, as with my kids understanding how their apps make money, it’s just a case of following the money.
The Australian Competition and Consumer Commission (ACCC) has called for “holistic, dynamic reforms” to address the online dominance of digital behemoths such as Google and Facebook.
A 600-page report, released today, makes 23 recommendations for regulating digital platforms – covering competition law, consumer protection, media regulation, and privacy.
Most of the suggested reforms are aimed squarely at countering the dominance of Facebook and Google, which the ACCC says has distorted a range of markets including advertising and media.
The ACCC recommends forming a new branch to deal specifically with Google and Facebook. But it doesn’t propose itself as the sole watchdog: the report also recommends a regulatory role for the Australian Communications and Media Authority (ACMA).
Meanwhile, the Office of the Australian Information Commissioner (OAIC) is called upon to develop an enforceable code to regulate platforms’ use of data. And even the Australian Tax Office will potentially be involved, as part of a proposal to introduce measures to encourage philanthropic funding of public-interest journalism.
Digital platforms with more than a million active users in Australia will be required to provide ACMA with codes to address the imbalance in the bargaining relationship between these platforms and news media businesses. These codes are expected to recognise the need for value-sharing and monetisation of news content.
Under the recommendations, ACMA would also be expected to monitor digital platforms’ efforts to identify reliable and trustworthy news, and to manage a mandatory take-down code for content that breaches copyright.
The ACCC report highlights the “substantial market power” enjoyed by Google and Facebook in their respective domains of web searching and social media. While it is not unlawful for firms to have this degree of power, it does mean they are likely to be subject to the (as yet untested) misuse of market power law introduced in 2017.
The ACCC is concerned that current merger laws do not go far enough, given large platforms’ ability to remove future competitive threats by simply buying start-ups outright. Such acquisitions may also increase the platforms’ access to data. The ACCC considers that either or both of these could entrench a platform’s market power.
As a result, the report recommends changes to Australia’s merger laws to expressly require consideration of the effect of potential competition, and to recognise the importance of data. It also recommends that platforms should be obliged to notify the ACCC in advance of any proposed acquisition.
This is not a substantial change to the existing law, which already allows consideration of anti-competitiveness. But it is a signal that the ACCC will be focusing on this issue.
The ACCC also wants Google to allow Australian users of Android devices to choose their search engine and internet browser – a right already enjoyed by Android users in the European Union.
The report’s most significant proposal in this area is to outlaw “unfair practices”, in line with similar bans in the US, UK, Europe, Canada, and elsewhere. This would cover conduct that is not covered by existing laws governing the misuse of market power, misleading or deceptive conduct, or unconscionable conduct.
This could be relevant, for example, where a digital platform imposes particularly invasive privacy terms on its users, which far outweigh the benefits of the service provided. The ACCC also called for digital platforms to face significant fines for imposing unfair contract terms on users.
The report recommends a new mandatory standard to bolster digital platforms’ internal dispute resolution processes. This would be reinforced by the creation of a new ombudsman to assist with resolving disputes and complaints between consumers and digital platforms.
The ACCC found that digital platforms’ privacy policies are long, complex, vague, and hard to navigate, and that many platforms do not provide consumers with meaningful control over how their data is handled.
The report therefore calls for stronger legal privacy protections, as part of a broader reform of Australian privacy law. This includes agreeing with the Australian Law Reform Commission on the need for a statutory tort for serious invasions of privacy.
Legal action ahead?
The ACCC also highlighted several matters on which it is considering future actions. These include the question of whether Facebook breached consumer law by allowing users’ data to be shared with third parties (potentially raising similar issues to the investigation by the US Federal Trade Commission, which this week resulted in a US$5 billion fine against Facebook), and whether Google has collated users’ location data in an unlawful way.
In a statement, Treasurer Josh Frydenberg and federal communications minister Paul Fletcher accepted the ACCC’s overriding conclusion that there is a need for reform.
The federal government will now begin a 12-week public consultation process, and said it expects to release its formal response to the report by the end of the year.
Rob Nicholls, Senior lecturer in Business Law, UNSW and Katharine Kemp, Senior Lecturer, Faculty of Law, UNSW, and Co-Leader, ‘Data as a Source of Market Power’ Research Stream of The Allens Hub for Technology, Law and Innovation, UNSW
Instagram is running a social media experiment in Australia and elsewhere to see what happens when it hides the number of likes on photos and other posts.
If you have an Instagram account, you’ll get to see the numbers but your followers won’t – at least, not automatically. They will be able to click and see who liked your post, but will have to count the list of names themselves.
The trial is taking place right now in six countries: Australia, Brazil, Canada, Ireland, Italy, Japan and New Zealand. Canada has just finished its trial.
We want your friends to focus on the photos and videos you share, not how many likes they get.
Likes, and their public tallying, have become the heart of Instagram and many other social media platforms. By hiding them, does Instagram risk devaluing a crucial currency?
Receiving loads of likes can feel like getting a gold star. It’s a public affirmation that you’re doing good work – a useful bit of quantitative feedback on your photographic skills or creativity. Under the new trial you’ll still get the gold star, but in private, and without broader recognition.
Nevertheless, the mental health repercussions of counting likes cannot be ignored. The design of social media promotes social comparison. You don’t have to spend long on Instagram to find a plethora of people who are evidently better-looking, more successful, and more glamorous than you.
As a result, young people can be left feeling inadequate and unworthy. Teens report that social media makes them feel closer to friends (78%), more informed (49%), and connected to family (42%). Yet many teens also report feeling pressure to always show the best versions of themselves (15%), overloaded with information (10%), overwhelmed (9%), or the dreaded “fear of missing out” (9%). These positive and negative reactions can see-saw, depending on a person’s particular mindset at the time.
Will comments become the new likes?
Without a public tally of likes, it is likely that comments will become an even stronger indicator of how people are interacting with a particular Instagram post.
Of course, comments can consist of anything from an emoji to an essay, and are therefore much more varied and adaptable than likes. Yet they can still affect users’ emotions and self-worth, particularly because (unlike likes), comments can be negative as well as positive.
The reaction among Australian Instagram users has so far been mixed. Many are disgruntled about the change, feel manipulated by the platform, and argue that the change will reduce Instagram’s appeal, particularly among those who use it to support their business.
But others have applauded the move on mental health grounds, while others still have reported that they are already feeling the difference that the experiment is designed to deliver.
Nevertheless, people could potentially move away from Instagram if they don’t feel it benefits them in the way they want. This could conceivably leave the market open for new social media platforms that unabashedly count likes for all to see.
Finally, there is the question of whether this is nothing but a PR stunt by a global mega-brand.
It’s perhaps natural to be sceptical where the social media industry is concerned. But if this is a genuine move by Instagram to ameliorate the negative mental health effects of social media, then it’s a valuable experiment, and the results may be very beneficial for some. Let’s hope so.