Twitter is banning political ads – but the real battle for democracy is with Facebook and Google



Twitter should get credit for its sensible move, but the microblogging company is tiny compared to Facebook and Google.
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Johan Lidberg, Monash University

Finally, some good news from the weirdo-sphere that is social media. Twitter CEO Jack Dorsey has announced that, effective November 22, the microblogging platform will ban all political advertising – globally.

This is a momentous move by Twitter. It comes when Facebook and its CEO Mark Zuckerberg are under increasing pressure to deal with the amount of mis- and disinformation published via paid political advertising on Facebook.

Zuckerberg recently told a congress hearing Facebook had no plans of fact-checking political ads, and he did not answer a direct question from Congresswoman Alexandria Ocasio-Cortez if Facebook would take down political ads found to be untrue. Not a good look.

A few days after Zuckerberg’s train wreck appearance before the congress committee, Twitter announced its move.




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While Twitter should get credit for its sensible move, the microblogging company is tiny compared to Facebook and Google. So, until the two giants change, Twitter’s political ad ban will have little effect on elections around the globe.

A symptom of the democratic flu

It’s important to call out Google on political advertising. The company often manages to fly under the radar on this issue, hiding behind Facebook, which takes most of the flack.

The global social media platforms are injecting poison into liberal democratic systems around the globe. The misinformation and outright lies they allow to be published on their platforms is partly responsible for the increasingly bitter deep partisan divides between different sides of politics in most mature liberal democracies.

Add to this the micro targeting of voters illustrated by the Cambridge Analytica scandal, and a picture emerges of long-standing democratic systems under extreme stress. This is clearly exemplified by the UK parliament’s paralysis over Brexit and the canyon-deep political divides in the US.




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Banning political advertising only deals with a symptom of the democratic flu the platforms are causing. The root cause of the flu is the fact social media platforms are no longer only platforms – they are publishers.

Until they acknowledge this and agree to adhere to the legal and ethical frameworks connected with publishing, our democracies will not recover.

Not platforms, but publishers

Being a publisher is complex and much more expensive than being a platform. You have to hire editorial staff (unless you can create algorithms advanced enough to do editorial tasks) to fact-check, edit and curate content. And you have to become a good corporate citizen, accepting you have social responsibilities.

Convincing the platforms to accept their publisher role is the most long-term and sustainable way of dealing with the current toxic content issue.

Accepting publisher status could be a win-win, where the social media companies rebuild trust with the public and governments by acting ethcially and socially responsibly, stopping the poisoning of our democracies.

Mark Zuckerberg claims Facebook users being able to publish lies and misinformation is a free speech issue. It is not. Free speech is a privilege as well as a right and, like all privileges, it comes with responsibilities and limitations.

Examples of limitations are defamation laws and racial vilification and discrimination laws. And that’s just the legal framework. The strong ethical frame work that applies to publishing should be added to this.

Ownership concentration like never before

Then, there’s the global social media oligopoly issue. Never before in recorded human history have we seen any industry achieve a level of ownership concentration displayed by the social media companies. This is why this issue is so deeply serious. It’s global, it reaches billions and the money and profits involved is staggering.




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The fightback against Facebook is getting stronger


Facebook co-founder, Chris Hughes, got it absolutely right when he in his New York Times article pointed out the Federal Trade Commission – the US equivalent to the Australian Competition and Consumer Commission – got it wrong when they allowed Facebook to buy Instagram and WhatsApp.

Hughes wants Facebook broken up and points to the attempts from parts of US civil society moving in this direction. He writes:

This movement of public servants, scholars and activists deserves our support. Mark Zuckerberg cannot fix Facebook, but our government can.

Yesterday, I posted on my Facebook timeline for the first time since the Cambridge Analytica scandal broke. I made the point that after Twitter’s announcement, the ball is now squarely in Facebook’s and Google’s courts.

For research and professional reasons, I cannot delete my Facebook account. But I can pledge to not be an active Facebook user until the company grows up and shoulders its social responsibility as an ethical publisher that enhances our democracies instead of undermining them.The Conversation

Johan Lidberg, Associate Professor, School of Media, Film and Journalism, Monash University

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

The ACCC is suing Google over tracking users. Here’s why it matters



The ACCC has been highly critical of how many large digital platforms use data.
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Katharine Kemp, UNSW

The Australian Competition and Consumer Commission (ACCC) today announced it is suing Google for misleading consumers about its collection and use of personal location data.

The case is the consumer watchdog’s first move against a major digital platform following the publication of the Digital Platforms Inquiry Final Report in July.

The ACCC follows regulators in countries including the US and Germany in taking action against the way “tech giants” such as Google and Facebook harvest and exploit their users’ data.

What did Google do?

ACCC Chair Rod Sims said Google “collected, kept and used highly sensitive and valuable personal information about consumers’ location without them making an informed choice”.

The ACCC alleges that Google breached the Australian Consumer Law (ACL) by misleading its users in the course of 2017 and 2018, including by:

  • not properly disclosing that two different settings needed to be switched off if consumers did not want Google to collect, keep and use their location data

  • not disclosing on those pages that personal location data could be used for a number of purposes unrelated to the consumer’s use of Google services.

Some of the alleged breaches can carry penalties of up to A$10 million or 10% of annual turnover.

A spokesperson for Google is reported to have said the company is reviewing the allegations and engaging with the ACCC.

The two separate settings that users needed to change to disable location tracking.
Android screenshots, Author provided

Turning off “Location History” did not turn off location history

According to the ACCC, Google’s account settings on Android phones and tablets would have led consumers to think changing a setting on the “Location History” page would stop Google from collecting, keeping and using their location data.

The ACCC says Google failed to make clear to consumers that they would actually need to change their choices on a separate setting titled “Web & App Activity” to prevent this location tracking.

Location data is used for much more than Google Maps

Google collects and uses consumers’ personal location data for purposes other than providing Google services to consumers. For example, Google uses location data to work out demographic information, target advertising, and offer advertising services to other businesses.

Digital platforms increasingly track consumers online and offline to create highly detailed personal profiles on each of us. These profiles are then used to sell advertising services. These data practices create risks of criminal data breaches, discrimination, exclusion and manipulation.




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Concealed data practices under fire around the world

The ACCC joins a number of other regulators and consumer organisations taking aim at the concealed data practices of the “tech giants”.

This year, the Norwegian Consumer Council published a report – Deceived by Design – which analysed a sample of Google, Facebook and Microsoft Windows privacy settings. The conclusion: “service providers employ numerous tactics in order to nudge or push consumers toward sharing as much data as possible”.

The report said some aspects of privacy policies can be seen as “dark patterns”, or “features of interface design crafted to trick users into doing things that they might not want to do”.

In Canada, an investigation into how Facebook gets consent for certain data practices by the Office of the Privacy Commissioner of Canada was highly critical.

It found that the relevant data use policy “contained blanket statements referencing potential disclosures of a broad range of personal information, to a broad range of individuals or organisations, for a broad range of purposes”. The result was that Facebook users “had no way of truly knowing what personal information would be disclosed to which app and for what purposes”.

Is Facebook next?

The ACCC was highly critical of the data practices of a number of large digital platforms when the Final Report of the Digital Platforms Inquiry was published in July this year. The platforms included Facebook, WhatsApp, Twitter and Google.

The report was particularly scathing about privacy policies which were long, complex, difficult to navigate and low on real choices for consumers. In its words, certain common features of digital platforms’ consent processes:

leverage digital platforms’ bargaining power and deepen information asymmetries, preventing consumers from providing meaningful consents to digital platforms’ collection, use and disclosure of their user data.

The report also stated the ACCC was investigating whether various representations by Google and Facebook respectively would “raise issues under the ACL”.

The investigations concerning Facebook related to representations concerning its sharing of user data with third parties and potential unfair contract terms. So far no proceedings against Facebook have been announced.




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Will this change anything?

While penalties of up to A$10 million or 10% of annual turnover (in Australia) may sound significant, last year Google made US$116 billion in advertising revenue globally.

In July, the US Federal Trade Commission settled with Facebook on a US$5 billion fine for repeatedly misleading users about the fact personal information could be accessed by third-party apps without the user’s consent, if a user’s Facebook “friend” gave consent. Facebook’s share price went up after the FTC approved the settlement.

But this does not mean the ACCC’s proceedings against Google are a pointless exercise. Aside from the impact on Google’s reputation, these proceedings may highlight for consumers the difference between platforms which have incentives to hide data practices from consumers and other platforms – like the search engine DuckDuckGo – which offer privacy-respecting alternatives.The Conversation

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

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

Regulating Facebook, Google and Amazon is hard given their bewildering complexity



Governments are attempting to regulate tech giants, but the digital disruption genie is already out of the bottle.
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Zac Rogers, Flinders University

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.




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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.




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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.




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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.The Conversation

Zac Rogers, Research Lead, Jeff Bleich Centre for the US Alliance in Digital Technology, Security, and Governance, Flinders University

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

Here’s how tech giants profit from invading our privacy, and how we can start taking it back



Your online activity can be turned into an intimate portrait of your life – and used for profit.
Shutterstock.com

Katharine Kemp, UNSW

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.




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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.

The vicious cycle of privacy abuse.
Helen J. Robinson, Author provided

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.




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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.




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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.




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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.

The ACCC also recommends Australia adopt a new law against “unfair trading practices”, similar to those used in other countries to tackle corporate wrongdoing including inadequate data security and exploitative terms of use.

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.The Conversation

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

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

Australian media regulators face the challenge of dealing with global platforms Google and Facebook



‘Google and Facebook are global companies, headquartered in the US, for whom Australia is a significant but relatively small market.’
Shutterstock/Roman Pyshchyk

Terry Flew, Queensland University of Technology

With concerns growing worldwide about the economic power of digital technology giants such as Google and Facebook, there was plenty of interest internationally in Australia’s Digital Platforms Inquiry.

The Australian Competition and Consumer Commission (ACCC) inquiry was seen as undertaking a forensic account of market dominance by digital platforms, and the implications for Australian media and the rights of citizens around privacy and data protection.

The inquiry’s final report, released last month, has been analysed from perspectives such as competition policy, consumer protection and the future of journalism.




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But the major limitation facing the ACCC, and the Australian government, in developing new regulations for digital platforms is jurisdictional authority – given these companies are headquartered in the United States.

More ‘platform neutral’ approach

Among the ACCC’s 23 recommendations is a proposal to reform media regulations to move from the current platform-specific approaches (different rules for television, radio, and print media) towards a “platform-neutral” approach.

This will ensure comparable functions are effectively and consistently regulated:

Digitalisation and the increase in online sources of news and media content highlight inconsistencies in the current sector-specific approach to media regulation in Australia […]

Digital platforms increasingly perform similar functions to media businesses, such as selecting and curating content, evaluating content, and ranking and arranging content online. Despite this, virtually no media regulation applies to digital platforms.

The ACCC’s recommendations to harmonise regulations across different types of media draw on major Australian public enquiries from the early 2010s, such as the Convergence Review and the Australian Law Reform Commission’s review of the national media classification system. These reports identified the inappropriateness of “silo-ised” media laws and regulations in an age of digital convergence.




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The ACCC also questions the continued appropriateness of the distinction between platforms and publishers in an age where the largest digital platforms are not simply the carriers of messages circulated among their users.

The report observes that such platforms are increasingly at the centre of digital content distribution. Online consumers increasingly access social news through platforms such as Facebook and Google, as well as video content through YouTube.

The advertising dollar

While the ACCC inquiry focused on the impact of digital platforms on news, we can see how they have transformed the media landscape more generally, and where issues of the wider public good arise.

Their dominance over advertising has undercut traditional media business models. Online now accounts for about 50% of total advertising spend, and the ACCC estimates that 71 cents of every dollar spent on digital advertising in Australia goes to Google or Facebook.

All media are now facing the implications of a more general migration to online advertising, as platforms can better micro-target consumers rather than relying on the broad brush approach of mass media advertising.

The larger issue facing potential competitors to the digital giants is the accumulation of user data. This includes the lack of transparency around algorithmic sorting of such data, and the capacity to use machine learning to apply powerful predictive analytics to “big data”.

In line with recent critiques of platform capitalism, the ACCC is concerned about the lack of information consumers have about what data the platforms hold and how it’s being used.

It’s also concerned the “winner-takes-most” nature of digital markets creates a long term structural crisis for media businesses, with particularly severe implications for public interest journalism.

Digital diversity

Digital platform companies do not sit easily within a recognisable industry sector as they branch across information technology, content media, and advertising.

They’re also not alike. While all rely on the capacity to generate and make use of consumer data, their business models differ significantly.

The ACCC chose to focus only on Google and Facebook, but they are quite different entities.

Google dominates search advertising and is largely a content aggregator, whereas Facebook for the most part provides display advertising that accompanies user-generated social media. This presents its own challenges in crafting a regulatory response to the rise of these digital platform giants.

A threshold issue is whether digital platforms should be understood to be media businesses, or businesses in a more generic sense.

Communications policy in the 1990s and 2000s commonly differentiated digital platforms as carriers. This indemnified them from laws and regulations relating to content that users uploaded onto their sites.

But this carriage/content distinction has always coexisted with active measures on the part of the platform companies to manage content that is hosted on their sites. Controversies around content moderation, and the legal and ethical obligations of platform providers, have accelerated greatly in recent years.

To the degree that companies such as Google and Facebook increasingly operate as media businesses, this would bring aspects of their activities within the regulatory purview of the Australian Communication and Media Authority (ACMA).

The ACCC recommended ACMA should be responsible for brokering a code of conduct governing commercial relationships between the digital platforms and news providers.




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This would give it powers related to copyright enforcement, allow it to monitor how platforms are acting to guarantee the trustworthiness and reliability of news content, and minimise the circulation of “fake news” on their sites.

Overseas, but over here

Companies such as Google and Facebook are global companies, headquartered in the US, for whom Australia is a significant but relatively small market.

The capacity to address competition and market dominance issues is limited by the fact real action could only meaningfully occur in their home market of the US.

Australian regulators are going to need to work closely with their counterparts in other countries and regions: the US and the European Union are the two most significant in this regard.The Conversation

Terry Flew, Professor of Communication and Creative Industries, Queensland University of Technology

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

What Australia’s competition boss has in store for Google and Facebook



Google will find it harder to expand, but there’s only so much the ACCC can do.
Shutterstock

Caron Beaton-Wells, University of Melbourne

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”.


ACCC, July 28, 2019

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.




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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.

This is a welcome initiative. It replicates similar capacity-building initiatives in the United States and Europe.

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.




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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.




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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.




Read more:
We can put a leash on Google and Facebook, but there’s no saving the traditional news model


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.The Conversation

Caron Beaton-Wells, Professor, Melbourne Law School, University of Melbourne

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

We can put a leash on Google and Facebook, but there’s no saving the traditional news model


Amanda Lotz, Queensland University of Technology

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.


Australians’ time spent online.
ACCC Digital Platforms Inquiry Final Report

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.

Limited recommendations

Its final report makes a swag of recommendations to limit these platforms’ market dominance and use of personal data.




Read more:
What Australia’s competition boss has in store for Google and Facebook


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.




Read more:
Consumer watchdog calls for new measures to combat Facebook and Google’s digital dominance


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.

Targeted revolution

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.


Australian advertising expenditure by media format and digital platform.
ACCC

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 Conversation

Amanda Lotz, Fellow, Peabody Media Center; Professor of Media Studies, Queensland University of Technology

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

Consumer watchdog calls for new measures to combat Facebook and Google’s digital dominance



Facebook and Google potentially face fresh curbs on their market power.
Shutterstock.com

Rob Nicholls, UNSW and Katharine Kemp, UNSW

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.




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


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.

Market muscle

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.

Empowering consumers

The ACCC recommends substantial changes to Australian Consumer Law, to address the huge inequalities in bargaining power between digital platforms and consumers when it comes to terms of use, and particularly privacy.

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.

Protecting privacy

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.




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


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.The Conversation

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

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

Goodbye Google+, but what happens when online communities close down?



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Google+ is the latest online community to close.
Shutterstock/rvlsoft

Stan Karanasios, RMIT University

This week saw the closure of Google+, an attempt by the online giant to create a social media community to rival Facebook.

If the Australian usage of Google+ is anything to go by – just 45,000 users in March compared to Facebook’s 15 million – it never really caught on.

Google+ is no longer available to users.
Google+/Screengrab

But the Google+ shutdown follows a string of organisations that have disabled or restricted community features such as reviews, user comments and message boards (forums).




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Sexual subcultures are collateral damage in Tumblr’s ban on adult content


So are we witnessing the decline of online communities and user comments?

Turning off online communities and user generated content

One of the most well-known message boards – which existed on the popular movie website IMDb since 2001 – was shut down by owner Amazon in 2017 with just two weeks’ notice for its users.

This is not only confined to online communities but mirrors a trend among organisations to restrict or turn off their user-generated content. Last year the subscription video-on-demand website Netflix said it no longer allowed users to write reviews. It subsequently deleted all existing user-generated reviews.

Other popular websites have disabled their comments sections, including National Public Radio (NPR), The Atlantic, Popular Science and Reuters.

Why the closures?

Organisations have a range of motivations for taking such actions, ranging from low uptake, running costs, the challenges of managing moderation, as well as the problem around divisive comments, conflicts and lack of community cohesion.

In the case of Google+, low usage alongside data breaches appear to have sped up its decision.

NPR explained its motivation to remove user comments by highlighting how in one month its website NPR.org attracted 33 million unique users and 491,000 comments. But those comments came from just 19,400 commenters; the number of commenters who posted in consecutive months was a fraction of that.

This led NPR’s managing editor for digital news, Scott Montgomery, to say:

We’ve reached the point where we’ve realized that there are other, better ways to achieve the same kind of community discussion around the issues we raise in our journalism.

He said audiences had also moved to engage with NPR more on Facebook and Twitter.

Likewise, The Atlantic explained that its comments sections had become “unhelpful, even destructive, conversations” and was exploring new ways to give users a voice.

In the case of IMDB closing its message boards in 2017, the reason given was:

[…] we have concluded that IMDb’s message boards are no longer providing a positive, useful experience for the vast majority of our more than 250 million monthly users worldwide.

The organisation also nudged users towards other forms of social media, such as its Facebook page and Twitter account @IMDB, as the “(…) primary place they (users) choose to post comments and communicate with IMDb’s editors and one another”.

User backlash

Unsurprisingly, such actions often lead to confusion, criticism and disengagement by user communities, and in some cases petitions to have the features reinstated (such as this one for Google+) and boycotts of the organisations.

But most organisations take these aspects into their decision-making.

The petition to save IMDB’s message boards.
Change.org/Screengrab

For fans of such community features these trends point to some harsh realities. Even though communities may self-organise and thrive, and users are co-creators of value and content, the functionality and governance are typically beyond their control.

Community members are at the mercy of hosting organisations, some profit-driven, which may have conflicting motivations to those of the users. It’s those organisations that hold the power to change or shut down what can be considered by some to be critical sources of knowledge, engagement and community building.

In the aftermath of shutdowns, my research shows that communities that existed on an organisation’s message boards in particular may struggle to reform.

This can be due to a number of factors, such as high switching costs, and communities can become fragmented because of the range of other options (Reddit, Facebook and other message boards).

So it’s difficult for users to preserve and maintain their communities once their original home is disabled. In the case of Google+, even its Mass Migration Group – which aims to help people, organisations and groups find “new online homes” – may not be enough to hold its online communities together.

The trend towards the closure of online communities by organisations might represent a means to reduce their costs in light of declining usage and the availability of other online options.

It’s also a move away from dealing with the reputational issues related to their use and controlling the conversation that takes place within their user bases. Trolling, conflicts and divisive comments are common in online communities and user comments spaces.

Lost community knowledge

But within online groups there often exists social and network capital, as well as the stock of valuable knowledge that such community features create.




Read more:
Zuckerberg’s ‘new rules’ for the internet must move from words to actions


Often these communities are made of communities of practice (people with a shared passion or concern) on topics ranging from movie theories to parenting.

They are go-to sources for users where meaningful interactions take place and bonds are created. User comments also allow people to engage with important events and debates, and can be cathartic.

Closing these spaces risks not only a loss of user community bases, but also a loss of this valuable community knowledge on a range of issues.The Conversation

Stan Karanasios, Senior Research Fellow, RMIT University

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

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.
Shutterstock

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.




Read more:
Constant attacks on the ABC will come back to haunt the Coalition government


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.




Read more:
The politics behind the competitive neutrality inquiry into ABC and SBS


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.