In a world first, Australia plans to force Facebook and Google to pay for news (but ABC and SBS miss out)


Rob Nicholls, UNSW

The Australian Competition and Consumer Commission has released its draft news media bargaining code, announced today by Treasurer Josh Frydenberg.

The draft code allows commercial news businesses to bargain – individually or collectively – with Google and Facebook, in order to be paid for news the tech giants publish on their services.

According to ACCC chair Rod Sims, the code aims to address the bargaining power imbalance between news publishers and major digital platforms, to bring about fair payment for news. As Frydenberg said:

We want Google and Facebook to continue to provide these services to the Australian community which are so much loved and used by Australians. But we want it to be on our terms.

The ACCC has previously found Google and Facebook’s failure to pay for news content is eating into the advertising revenues which fund journalism.

But what’s ‘news’?

The code is set out as exposure draft legislation and an explanatory memorandum.

These set out the rules for who can bargain. To be eligible, a news business must have employed journalists, earn more than A$150,000 per year in revenue and be registered with the Australian Communications and Media Authority (ACMA).

And they must provide “core news”, defined as:

journalism on publicly significant issues, journalism that engages Australians in public debate and informs democratic decision making, and journalism relating to community and local events.

How will bargains be struck?

The code does not specify how much news businesses should be paid. Instead, it provides a negotiating process in which Google and Facebook must take part. The negotiating phase lasts three months and includes at least one day of mediation.

If there is no agreement at the end, the process moves to compulsory arbitration (by an ACMA appointed panel) which both parties pay for. The arbitration panel will then select one of the final offers in a process sometimes called “baseball determination”. Their decision will be binding.

The range of Facebook services subject to arbitration include Facebook News Feed, Instagram and the Facebook News Tab. The Google services are Google Search, Google News and Google Discover.

WhatsApp (owned by Facebook) and Youtube (owned by Google) are not included. But if both parties agree, arbitration under the draft code could include other relevant digital platform services, too.

The ACCC will also be able to make submissions in the arbitration process (which the arbitrator can decide to consider or not). Under limited and unlikely circumstances, the arbitrator may adjust the more reasonable of the final two offers.

Algorithmic change notices

The draft code introduces a series of “minimum standards” for digital platforms to meet in their dealings with news businesses.

These include a requirement for Google and Facebook to give 28 days’ notice of any algorithmic change that will affect either referral traffic to news or the ranking of news behind paywalls.

This gives news businesses the opportunity to adapt their business models to ensure their content retains its prominence. More importantly, it means their negotiated revenue will not drop. It may also help in decisions about what content stays behind paywalls.

The same notice period is required for substantial changes to the display and presentation of news and advertising directly associated with news.

There will be an obligation on Google and Facebook to give businesses clear information about the nature and availability of user data collected through users’ interactions with the news.

This does not mean Google or Facebook must share the data itself — only that news businesses will be informed of what kind of data are being collected.

More moderation opportunities

There are also obligations on the tech giants to publish proposals which appropriately recognise the media business’ original news on their platforms and to provide those businesses with flexible tools for user comment moderation.

In addition, Google and Facebook must allow news businesses to prevent their news from being included on any individual platform service. For instance, they may choose for an article to appear on Google Search but not Google News.

News businesses will be able to moderate comments more easily. This is important considering they can be sued for comments published on their posts via platforms such as Facebook.




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ABC and SBS lose out

The ABC and SBS only benefit from the minimum standards imposed on digital platforms under the code. They are excluded from the remuneration process. The government said this is because advertising revenue is not the principal source of funding for public broadcasters.

Anti-discrimination provisions are expected to prevent Google and Facebook from prioritising publicly-funded news to take advantage of this.

Not a windfall, but still good news

The draft code won’t result in a A$600 million payday for news businesses, as Nine’s chair proposed in May. However, the negotiation and arbitration process does provide certainty of a positive commercial outcome for news providers relying on advertising.

There will also be more work required for Google and Facebook to give notice of algorithmic changes, which are managed in the United States. This obligation will mean adjustments to both the tech giants’ business models.

Google has already taken steps down this path by successfully negotiating revenue sharing with some Australian news businesses. In effect, it has created a benchmark for its position in the new negotiation framework.

Meanwhile, Facebook has argued “news does not drive significant long-term commercial value” for it. However, it said it was committed to following “sensible regulatory frameworks for digital news”.




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Penalties for breach

A breach of the code by Facebook or Google could have a few potential outcomes. The first is an infringement notice which has a penalty of A$133,200 for each breach.

If the ACCC takes one of the tech giants to court, the maximum penalty is the higher of A$10 million, 10% of the digital platform’s turnover in Australia in the past 12 months, or three times the benefit obtained by the tech giant as a result of the breach (if this can be calculated).

The ACCC has previously had success against franchisers for breaches of the mandatory Franchising Code. It will likely be just as vigilant in policing the news media bargaining code.

The draft code is open for public comment until the end of August. The final version will likely be considered by parliament in September.The Conversation

Rob Nicholls, Associate professor in Business Law. Director of the UNSW Business School Cybersecurity and Data Governance Research Network, UNSW

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

The ACCC is suing Google for misleading millions. But calling it out is easier than fixing it



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Katharine Kemp, UNSW

Australia’s consumer watchdog is suing Google for allegedly misleading millions of people after it started tracking them on non-Google apps and websites in 2016.

The Australian Competition and Consumer Commission (ACCC) says Google’s pop-up notification about this move didn’t let users make an informed choice about the increased tracking of their activities.

Google uses some of this data in its targeted advertising business. It can also collect sensitive information about us from third-party websites and apps which it may use in its non-advertising businesses.

The ACCC isn’t the first to claim Google hasn’t been straight about how it uses our data, nor is this the first time it has sued Google.

But even if Google gave us the whole story, what can we actually do about growing surveillance?




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Google tracks your activities beyond Google

While it would take a separate article to list all the ways Google tracks your activities online and offline, the ACCC is concerned about two of the company’s data practices in particular.

First, Google has been collecting data about what you do on websites that may not seem related to Google at all. This is combined with other data collected by Google’s own services including YouTube, Gmail, Google Maps and Chrome.

The reason Google can do this is that third-party websites and apps also use Google’s services, such as ad serving or Google Analytics.

Their agreements with Google allow it to embed its technology into the websites and apps and send your activity information back to Google, without alerting you.

Second, the ACCC is concerned Google has combined its own extensive Google account holder datasets with personal data collected by ad tech company DoubleClick, which Google acquired in 2007.
This is despite Google initially claiming it wouldn’t do this without users opting in.

The data Google collects, and how it’s used

Google’s technologies are embedded in millions of third-party websites (and likely many of the ones you use).

So it’s well placed to collect data about your online activities, including research you might do on intimate topics such as depression, miscarriage, abortion, diabetes, weight loss, heart disease, divorce, erectile dysfunction and so on.

Google can then combine this data with the information it already has about you from its own services, such as where you live, what you buy, where you go and who you associate with.

Google says it doesn’t use users’ health data or other “sensitive” data for its targeted advertising business. But it does not promise it won’t collect such sensitive data, keep it, combine it with data about our other activities or use it for non-advertising business purposes.

For example, Google has made moves to enter various health services markets. And there’s speculation it may start supplying health products and life insurance in future.

Further, unless you have changed the “ad personalisation” settings in your Google account, Google can use data from third-party sites which it does not classify as “sensitive” to target you with ads. This data could include whether you’re searching for baby clothes, travel insurance, retirement living, or a house in a specific suburb.

But even if you have opted out of personalised ads, Google’s privacy policy doesn’t say it will stop collecting and retaining the data itself.

Online search for 'depression'.
Google has access to enough information to build highly detailed profiles of users, covering different aspects of their lives.
Shutterstock

What was misleading?

The ACCC claims Google’s 2016 notification about its increased tracking was misleading. The notice led with the benign headline, “Some new features for your Google Account”, followed by:

We’ve introduced some optional features for your account, giving you more control over the data Google collects and how it’s used, while allowing Google to show you more relevant ads.

The statements further down in the notification were arguably unclear about what Google actually planned to change. The ACCC says the notification was misleading because:

Consumers could not have properly understood the changes Google was making nor how their data would be used and so did not – and could not – give informed consent.

It claims Google also misled consumers by stating in its privacy policy that it would not reduce users’ rights under the policy without their explicit consent, but then did exactly that.




Read more:
94% of Australians do not read all privacy policies that apply to them – and that’s rational behaviour


Privacy concerns warrant legal backing

In this case, the ACCC’s issue is that Google didn’t give consumers the real story about its plan to vastly increase personal data collection and use this information for commercial purposes. The ACCC’s action against Google should be a warning to all companies that currently fudge their privacy terms.

But what if Google had been transparent and the pop-up box instead said: “we are going to start collecting your personal data whenever you use third-party websites or apps that use Google technologies”?

Given the millions of websites using Google technologies, is it even possible for consumers to avoid this?

In Germany, the Federal Cartel Office last year found Facebook had abused its dominance by insisting on collecting users’ personal data via embedded technologies on non-Facebook websites and apps.

It argued Facebook’s market power gave it the ability to impose these practices on users, even against their wishes.

Australia does not have an “abuse of dominance law” to address single-firm exploitative conduct, such as raising prices or imposing intrusive privacy terms. Facebook currently collects data about Facebook users – and even non-users – from third-party websites and apps in Australia, without alerting us.

Facebook logo with multiple 'dislike' buttons.
Facebook has also come under fire for tracking its users’ activities on non-Facebook websites.
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The ACCC may succeed in proving misleading conduct by Google. And it might obtain a substantial fine against Google – potentially up to 10% of Google’s turnover in Australia.

But to stop tech giants from doing whatever they like with our data, we’ll need to consider a broader law against unfair practices.




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Australia’s privacy watchdog is taking Facebook to court. It’s a good start


The Conversation


Katharine Kemp, Senior Lecturer, Faculty of Law, UNSW, and Academic Lead, UNSW Grand Challenge on Trust, UNSW

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

No more negotiating: new rules could finally force Google and Facebook to pay for news




Katharine Kemp, UNSW and Rob Nicholls, UNSW

Digital platforms such as Google and Facebook will be forced to compensate news media companies for using their content, under a new mandatory code to be drawn up by Australia’s competition watchdog.

The announcement, made by Treasurer Josh Frydenberg today, follows last year’s landmark report by the Australian Competition and Consumer Commission (ACCC), which found that news media businesses lack bargaining power in their negotiations with digital giants.




Read more:
Government orders mandatory code of conduct for Google, Facebook


News media businesses have complained for years that the loss of advertising revenue to Google and Facebook threatens their survival. The economic crash caused by the COVID-19 pandemic has turned that crisis into an emergency.

Frydenberg pledged that the latest move will “level the playing field”, adding: “It’s only fair that those that generate content get paid for it.”

Power imbalance and tumbling profits

A mandatory code of conduct was not the original plan. When the ACCC released its report last year, it suggested that Google and Facebook should each negotiate with news media businesses to agree on how they should fairly share revenues generated when “the digital platform obtains value, directly or indirectly, from content produced by news media businesses”.

The report concluded that tech giants are currently enjoying the benefit of news businesses’ content without paying for the privilege.

For example, Google’s search results feature “news snippets” including content from news websites. Both Google and Facebook have quick-loading versions of news businesses’ articles that don’t display the full range of paid advertising that appears on the news websites’ own pages.

These tactics make it less likely users will click through to the actual news website, thus depriving media businesses of the ensuing subscription and advertising revenue. Meanwhile, as the ACCC report showed, media companies’ share of advertising revenue has itself been slashed over the past decade, as advertisers flock to Google and Facebook.

Platforms giveth, platforms taketh away

Why don’t news businesses negotiate compensation payments with the platforms themselves, rather than asking the government to step in?

The answer is the vast mismatch in bargaining power between Australian media companies and global digital giants.

The ACCC report found that digital platforms such as Google and Facebook are “an essential gateway for news for many consumers”, meaning the news businesses rely on them for “referral traffic”.

Put simply, much of news companies’ web traffic comes via readers clicking on links from Google and Facebook. But at the same time, these digital giants are dominating advertising revenues and using news companies’ content in competition with them.

The pandemic effect

The COVID-19 crisis has dealt a further blow to media companies’ advertising revenue, as potential advertisers are forced into economic hibernation or simply go out of business.

Content licensing payments from Google and Facebook could provide crucial alternative revenue. But if the payments are structured as a share of advertising income, the publishers will share in Google and Facebook’s own advertising downturn.

The ACCC will not unveil the draft code until July, so it is still unclear how the obligations will be implemented or enforced.

ACCC chief Rod Sims has pledged that Australia’s mandatory code of conduct will feature “heavy penalties” for Facebook and Google if they fail to comply, involving fines that are “large enough to matter”.

How might Google and Facebook react?

The platforms could conceivably attempt to sidestep the compensation rules by no longer providing users with quick-loading versions of news articles. Google could also cease publishing news snippets at the top of its search results, as it did in Spain when faced with similar obligations.

But there is evidence, albeit from news publishers themselves, that this would merely drive readers directly to publishers’ websites.




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


Australia’s decision to abandon negotiations in favour of mandatory rules stands in contrast to the situation in France, the European state most advanced in the implementation of a similar policy flowing from the European Union’s 2019 Copyright Directive.

Earlier this month, France’s competition regulator ordered Google to negotiate in good faith with publishers on remuneration for use of content. Any agreed compensation will be backdated to October 24, 2019, when the Copyright Directive became law in France.

Google’s previous solution had been to require that publishers license the use of snippets of their content to Google at no charge. But France’s watchdog argued this was an abuse of Google’s dominant position.

Google and Facebook are likely to continue to resist these developments in Australia, knowing they could be copied in other jurisdictions.

Even if they do cooperate, it’s not yet clear that “levelling the playing field” with the tech giants will make any difference to the collapse of media advertising revenue driven by the coronavirus.The Conversation

Katharine Kemp, Senior Lecturer, Faculty of Law, UNSW, and Academic Lead, UNSW Grand Challenge on Trust, UNSW and Rob Nicholls, Associate professor in Business Law. Director of the UNSW Business School Cybersecurity and Data Governance Research Network, UNSW

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

Government orders mandatory code of conduct for Google, Facebook


Michelle Grattan, University of Canberra

The government has told the Australian Competition and Consumer Commission to develop a mandatory code of conduct to address bargaining power imbalances between media companies and digital platforms such as Facebook and Google – and the question of payment for content.

Earlier the ACCC was directed by the government to facilitate a voluntary code. But slow progress and the impact on the media of the coronavirus have convinced the government of the need for more urgent and compulsory action.

In its Digital Platforms Inquiry report of last year, the ACCC identified a bargaining power imbalance between news media organisations and these large digital platforms, and recommended codes of conduct to govern commercial relationships.

Treasurer Josh Frydenberg and Communications Minister Paul Fletcher have said in a statement the timeframe needs to be accelerated.

“The Australian media sector was already under significant pressure – that has now been exacerbated by a sharp decline in advertising revenue driven by coronavirus,” the ministers say.

“At the same time, while discussions between the parties have been taking place, progress on a voluntary code has been limited, according to recent advice provided by the ACCC”.

The ministers say the ACCC considers it unlikely any voluntary agreement would be reached on the key issue of payment for content.

The code will cover data sharing, ranking and display of news content, and the monetisation and the sharing of revenue generated from news. It will also include enforcement, penalty and binding dispute resolution mechanisms.

The ACCC will release a draft before the end of July, and the government wants the code finalised soon after that.

The University of Canberra’s 2019 Digital News Report said the majority of surveyed consumers who access news online get this news via indirect methods, such as social media, news aggregators, email newsletters and mobile alerts.

According to Nielsen Panel Data for February 2019, Google search had a unique audience of 19.7 million in Australia, and Facebook had a unique audience of 17.6 million.The Conversation

Michelle Grattan, Professorial Fellow, University of Canberra

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

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


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.
Shutterstock

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


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


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.




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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.