A tale of two media reports: one poses challenges for digital media; the other gives ABC and SBS a clean bill of health



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The competitive neutrality report has given the ABC, and SBS, a clean bill of health.
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Denis Muller, University of Melbourne

Two reports out this week – one into the operations of Facebook and Google, the other into the competitive neutrality of the ABC and SBS – present the federal government with significant policy and political challenges.

The first is by far the more important of the two.

It is the interim report by the Australian Competition and Consumer Commission of its Digital Platforms Inquiry, and in a set of 11 preliminary recommendations it proposes far-reaching changes to media regulation.

Of particular interest are its preliminary recommendations for sustaining journalism and news content.

These are based on the premise that there is a symbiotic relationship between news organisations and the big digital platforms. Put simply, the news organisations depend heavily on these platforms to get their news out to their audiences.

The problem, the ACCC says, is that the way news stories are ranked and displayed on the platforms is opaque. All we know – or think we know – is that these decisions are made by algorithms.




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The ACCC says this lack of transparency causes concerns that the algorithms and other policies of the platform giants may be operating in a way that affects the production of news and journalistic content.

To respond to this concern, the preliminary recommendation is for a new regulatory authority to be established. It would have the power to peer into these algorithms and monitor, investigate and report on how content – including news content – is ranked and displayed.

The purpose would be to identify the effects of the algorithms and other policies on the production of news and journalistic content.

It would also allow the authority to assess the impact on the incentives for news and journalistic content creation, particularly where news organisations have invested a lot of time and money in producing original content.

In this way, the ACCC is clearly trying to protect and promote the production of public-interest journalism, which is expensive but vital to democratic life. It is how the powerful are held to account, how wrongdoing is uncovered, and how the public finds out what is going on inside forums such as the courts and local councils.

So far, the big news media organisations have concentrated on these aspects of the ACCC interim report and have expressed support for them.

However, there are two other aspects of the report on which their response has been muted.

The first of these is the preliminary recommendation that proposes a media regulatory framework that would cover all media content, including news content, on all systems of distribution – print, broadcast and online.

The ACCC recommends that the government commission a separate independent review to design such a framework. The framework would establish underlying principles of accountability, set boundaries around what should be regulated and how, set rules for classifying different types of content, and devise appropriate enforcement mechanisms.

Much of this work has already been attempted by earlier federal government inquiries – the Finkelstein inquiry and the Convergence Review – both of which produced reports for the Gillard Labor government in 2012.

Their proposals for an overarching regulatory regime for all types of media generated a hysterical backlash from the commercial media companies, who accused the authors of acting like Stalin, Mao, or the Kim clan in North Korea.

So if the government adopts this recommendation from the ACCC, the people doing the design work can expect some heavy flak from big commercial media.

The other aspect of the ACCC report that is likely to provoke a backlash from the media is a preliminary recommendation concerning personal privacy.

Here the ACCC proposes that the government adopt a 2014 recommendation of the Australian Law Reform Commission that people be given the right to sue for serious invasions of privacy.

The media have been on notice over privacy invasion for many years. As far back as 2001, the High Court developed a test of privacy in a case involving the ABC and an abattoir company called Lenah Game Meats.

Now, given the impact on privacy of Facebook and Google, the ACCC has come to the view that the time has arrived to revisit this issue.

The ACCC’s interim report is one of the most consequential documents affecting media policy in Australia for many decades.

The same cannot be said of the other media-related report published this week: that of the inquiry into the competitive neutrality of the public-sector broadcasters, the ABC and SBS.

This inquiry was established in May this year to make good on a promise made by Malcolm Turnbull to Pauline Hanson in 2017.




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He needed One Nation’s support for the government’s changes to media ownership laws, without which they would not have passed the Senate.

Hanson was not promised any particular focus for the inquiry, so the government dressed it up in the dull raiment of competitive neutrality.

While it had the potential to do real mischief – in particular to the ABC – the report actually gives both public broadcasters a clean bill of health.

There are a couple of minor caveats concerning transparency about how they approach the issue of fair competition, but overall the inquiry finds that the ABC and SBS are operating properly within their charters. Therefore, by definition, they are acting in the public interest.

This has caused pursed lips at News Corp which, along with the rest of the commercial media, took this opportunity to have a free kick at the national broadcasters. But in the present political climate, the issue is likely to vanish without trace.

While the government still has an efficiency review of the ABC to release, it also confronts a political timetable and a set of the opinion polls calculated to discourage it from opening up another row over the ABC.The Conversation

Denis Muller, Senior Research Fellow in the Centre for Advancing Journalism, University of Melbourne

This article is republished from The Conversation under a Creative Commons license. Read the original article.

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ACCC wants to curb digital platform power – but enforcement is tricky


Katharine Kemp, UNSW

We need new laws to monitor and curb the power wielded by Google, Facebook and other powerful digital platforms, according to the Australian Competition and Consumer Commission (ACCC).

The Preliminary Report on the Digital Platforms Inquiry found major changes to privacy and consumer protection laws are needed, along with alterations to merger law, and a regulator to investigate the operation of the companies’ algorithms.

Getting the enforcement right will be key to the success of these proposed changes.




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Digital platforms. Why the ACCC’s proposals for Google and Facebook matter big time


Scrutinising accumulation of market power

The report says Google and Facebook each possess substantial power in markets such as online search and social media services in Australia.

It’s not against the law to possess substantial market power alone. But these companies would breach our November 2017 misuse of market power law if they engaged in any conduct with the effect, likely effect or purpose of substantially lessening competition – essentially, blocking rivalry in a market.

Moving forwards, the ACCC has indicated it will scrutinise the accumulation of market power by these platforms more proactively. Noting that “strategic acquisitions by both Google and Facebook have contributed to the market power they currently hold”, the ACCC says it intends to ask large digital platforms to provide advance notice of any planned acquisitions.

While such pre-notification of certain mergers is required in jurisdictions such as the US, it is not currently a requirement in other sectors under the Australian law.

At the moment the ACCC is just asking the platforms to do this voluntarily – but has indicated it may seek to make this a formal requirement if the platforms don’t cooperate with the request. It’s not currently clear how this would be enforced.

The ACCC has also recommended the standard for assessing mergers should be amended to expressly clarify the relevance of data acquired in the transaction as well as the removal of potential competitors.

The law doesn’t explicitly refer to potential competitors in addition to existing competitors at present, and some argue platforms are buying up nascent competitors before the competitive threat becomes apparent.




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A regulator to monitor algorithms

According to the ACCC, there is a “lack of transparency” in Google’s and Facebook’s arrangements concerning online advertising and content, which are largely governed by algorithms developed and owned by the companies. These algorithms – essentially a complex set of instructions in the software – determine what ads, search results and news we see, and in what order.

The problem is nobody outside these companies knows how they work or whether they’re producing results that are fair to online advertisers, content producers and consumers.

The report recommends a regulatory authority be given power to monitor, investigate and publish reports on the operation of these algorithms, among other things, to determine whether they are producing unfair or discriminatory results. This would only apply to companies that generate more than A$100 million per annum from digital advertising in Australia.




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These algorithms have come under scrutiny elsewhere. The European Commission has previously fined Google €2.42 billion for giving unfair preference to its own shopping comparison services in its search results, relative to rival comparison services, thereby contravening the EU law against abuse of dominance. This decision has been criticised though, for failing to provide Google with a clear way of complying with the law.

The important questions following the ACCC’s recommendation are:

  • what will the regulator do with the results of its investigations?
  • if it determines that the algorithm is producing discriminatory results, will it tell the platform what kind of results it should achieve instead, or will it require direct changes to the algorithm?

The ACCC has not recommended the regulator have the power to make such orders. It seems the most the regulator would do is introduce some “sunshine” to the impacts of these algorithms which are currently hidden from view, and potentially refer the matter to the ACCC for investigation if this was perceived to amount to a misuse of market power.

If a digital platform discriminates against competitive businesses that rely on its platform – say, app developers or comparison services – so that rivalry is stymied, this could be an important test case under our misuse of market power law. This law was amended in 2017 to address longstanding weaknesses but has not yet been tested in the courts.




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Privacy and fairness for consumers

The report recommends substantial changes to the Privacy Act and Australian Consumer Law to reduce the power imbalance between the platforms and consumers.

We know from research that most Australians don’t read online privacy policies; many say they don’t understand the privacy terms offered to them, or they feel they have no choice but to accept them. Two thirds say they want more say in how their personal information is used.

The solutions proposed by the ACCC include:

  • strengthening the consent required under our privacy law, requiring it to be express (it may currently be implied), opt-in, adequately informed, voluntary and specific
  • allowing consumers to require their personal data to be erased in certain circumstances
  • increasing penalties for breaches of the Privacy Act
  • introducing a statutory cause of action for serious invasion of privacy in Australia.



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This last recommendation was previously made by the Australian Law Reform Commission in 2014 and 2008, and would finally allow individuals in Australia to sue for harm suffered as a result of such an invasion.

If consent is to be voluntary and specific, companies should not be allowed to “bundle” consents for a number of uses and collections (both necessary and unnecessary) and require consumers to consent to all or none. These are important steps in addressing the unfairness of current data privacy practices.

Together these changes would bring Australia a little closer to the stronger data protection offered in the EU under the General Data Protection Regulation.

But the effectiveness of these changes would depend to a large extent on whether the government would also agree to improve funding and support for the federal privacy regulator, which has been criticised as passive and underfunded.

Another recommended change to consumer protection law would make it illegal to include unfair terms in consumer contracts and impose fines for such a contravention. Currently, for a first-time unfair contract terms “offender”, a court could only “draw a line” through the unfair term such that the company could not force the consumer to comply with it.

Making such terms illegal would increase incentives for companies drafting standard form contracts to make sure they do not include detrimental terms which create a significant imbalance between them and their customers, which are not reasonably necessary to protect their legitimate interests.




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The ACCC might also take action on these standard terms under our misleading and deceptive conduct laws. The Italian competition watchdog last week fined Facebook €10 million for conduct including misleading users about the extent of its data collection and practices.

The ACCC appears to be considering the possibility of even broader laws against “unfair” practices, which regulators like the US Federal Trade Commission have used against bad data practices.

Final report in June 2019

As well as 11 recommendations, the report mentions nine areas for “further analysis and assessment” which in itself reflects the complexity of the issues facing the ACCC.

The ACCC is seeking responses and feedback from stakeholders on the preliminary report, before creating a final report in June 2019.

Watch this space – or google it.




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The Conversation


Katharine Kemp, 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

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Digital platforms. Why the ACCC’s proposals for Google and Facebook matter big time


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The Competition and Consumer Commission is worried about the ability of the platforms we use to determine the news we read.
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Sacha Molitorisz, University of Technology Sydney and Derek Wilding, University of Technology Sydney

The Australian Competition and Consumer Commission has released the preliminary report of its Digital Platforms Inquiry, and Google and Facebook won’t be happy.

Rather than adopting a gently-gently approach, the ACCC has produced draft recommendations that are extensive and dramatic.

If implemented, they would significantly affect the way the digital platforms make their money, and help direct the content we consume.

What’s more, the inquiry is touted as a world first. Its findings will be closely monitored, and perhaps even adopted, by regulators internationally.

Who should care?

The digital platforms themselves should (and do) care.

Any new regulations designed to foster competition or protect individual privacy (both are among the ACCC’s recommendations) have the potential to harm their revenues.

They’ve a lot to lose. In 2017, nearly A$8 billion was spent on online advertising in Australia, and more than half went to Google and Facebook (p3).

News organisations whose output is disseminated by those platforms should (and do) care too.

As the ACCC notes, more than half of the traffic on Australian news websites comes via Google and Facebook (p8).




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Increasingly, news producers depend on social media and search engines to connect with consumers. Google is used for 95% of searches (98% on mobile devices).

The rise of Google, Facebook and other digital platforms has been accompanied by unprecedented pressures on traditional news organisations.

Most obviously, classified advertising revenue has been unbundled from newspapers.

In 2001, classified advertising revenue stood at A$2 billion. By 2016, it had fallen to A$200 million. The future of newspapers’ ability to produce news is under a cloud, and digital platforms help control the weather.

Of course, advertisers care too.

But the stakeholders with the most to gain or lose are us, Australian citizens.




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Our lives are mediated by Google, Facebook, Apple, Amazon, Twitter and others as never before. Google answers our search queries; Facebook hosts friends’ baby snaps; YouTube (owned by Google) distributes professional and user-generated videos; Instagram (owned by Facebook) hosts our holiday snaps.

As the ACCC notes, they have given us tremendous benefits, for minimal (apparent) cost.

And they’ve done it at lightning speed. Google arrived in 1998, Facebook in 2004 and Twitter in 2006. They are mediating what comes before our eyes in ways we don’t understand and (because they keep their algorithms secret) in ways we can’t understand.

What does the ACCC recommend?

The ACCC’s preliminary recommendations are far-reaching and bold.

First, it suggests an independent review to address the inadequacy of current media regulatory frameworks.

This would be a separate, independent inquiry to “design a regulatory framework that is able to effectively and consistently regulate the conduct of all entities which perform comparable functions in the production and delivery of content in Australia, including news and journalistic content, whether they are publishers, broadcasters, other media businesses, or digital platforms”.

This is a commendable and urgent proposal. Last year, cross-media ownership laws were repealed as anachronistic in a digital age. To protect media diversity and plurality, the government needs to revisit the issue of regulatory frameworks.




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Second, it proposes privacy safeguards. Privacy in Australia is dangerously under-protected. Digital platforms such as Google and Facebook generate revenue by knowing their users and targeting advertising with an accuracy unseen in human history.

As the ACCC puts it, “the current regulatory framework, including privacy laws, does not effectively deter certain data practices that exploit the information asymmetries and the bargaining power imbalances that exist between digital platforms and consumers.”

It makes a number of specific preliminary recommendations, including creating a right to erasure and the requirement of “express, opt-in consent”.

It also supports the creation of a civil right to sue for serious invasions of privacy, as recommended by the Australian Law Reform Commission.

Australians lack the protections that Americans enjoy under the US Bill of Rights; we certainly lack the protection afforded under Europe’s sweeping new privacy law.




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It wants the penalties for breaches of our existing Privacy Act increased. It recommends the creation of a third-party certification scheme, which would enable the Office of the Australian Information Commissioner to give complying bodies a “privacy seal or mark”.

And it wants a new or existing organisation to monitor attempts by vertically-integrated platforms such as Google to favour their own businesses. This would happen where Google gives prominence in search results to products sold through Google platforms, or prominence to stories from organisations with which it has a commercial relationship.

The organisation would oversee platforms that generate more than A$100 million annually, and which disseminate news, or hyperlinks to news, or snippets of news.

It would investigate complaints and even initiate its own investigations in order to understand how digital platforms are disseminating news and journalistic content and advertising.

As it notes,

The algorithms operated by each of Google and Facebook, as well as other policies, determine which content is surfaced and displayed to consumers in news feed and search results. However, the operation of these algorithms and other policies determining the surfacing of content remain opaque. (p10)

It makes other recommendations, touching on areas including merger law, pre-installed browsers and search engines, takedown procedures for copyright-infringing content, implementing a code of practice for digital platforms and changing the parts of Australian consumer law that deal with unfair contract terms.

Apart from its preliminary recommendations, there are further areas on which it invites comment and suggestions.




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These include giving media organisations tax offsets for producing public interest news, and making subscribing to news publications tax deductible for consumers.

Platforms could be brought into a co-regulatory system for flagging content that is subject to quality control, creating their own quality mark. And a new ombudsman could deal with consumer complaints about scams, misleading advertising and the ranking of news content.

All of these recommendations and areas of interest will generate considerable debate.

What’s next?

The ACCC will accept submissions in response to its preliminary report until February 15.

At the Centre for Media Transition, we played a background role in one aspect of this inquiry.

Earlier this year, we were commissioned by the ACCC to prepare a report on the impact of digital platforms on news and journalistic content. It too was published on Monday.

Our findings overlap with the ACCC on some points, and diverge on others.




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Many thorny questions remain, but one point is clear: the current regime that oversees digital platforms is woefully inadequate. Right now, as the ACCC notes, digital platforms are largely unregulated.

New ways of thinking are needed. A mix of old laws (or no laws) and new media spells trouble.The Conversation

Sacha Molitorisz, Postdoctoral Research Fellow, Centre for Media Transition, Faculty of Law, University of Technology Sydney and Derek Wilding, Co-Director, Centre for Media Transition, University of Technology Sydney

This article is republished from The Conversation under a Creative Commons license. Read the original article.