ACCC Release Issues Paper for News and Digital Platforms Inquiry

Wednesday 28 February 2018 @ 10.12 a.m. | IP & Media | Legal Research

On Monday, 26 February 2018, the Australian Competition and Consumer Commission (ACCC) released an issues paper looking into the “impact of digital search engines, social media platforms and other digital content aggregation platforms on the state of competition in media and advertising services markets (the Inquiry)” (p 2). The ACCC will be accepting submissions to the inquiry until 3 April 2018.

ACCC Chairman Rod Sims outlined the aim of the inquiry in a media release on 26 February 2018:

“Digital platforms like Google and Facebook are part of the sweeping technological and cultural changes overhauling the media landscape in Australia and globally.

While these technological changes have brought many benefits for consumers, this inquiry will have a particular focus on examining whether the changes affect the quality and range of news supplied to Australian consumers.

Considering the longer term impacts of digital platforms and the ability of traditional media to remain financially viable will also be key to understanding the media and advertising markets.

Our aim is also to understand better the digital platforms’ business models and how they operate behind the scenes, and the evolving nature of the way consumers search for and receive news in Australia. We are particularly interested in the extent to which digital platforms curate news and journalistic content.”

Terms of Reference

The inquiry was initiated on 4 December 2017, by the Treasurer, the Honourable Scott Morrison MP. The inquiry “is to look at the impact, in particular, in relation to the supply of news and journalistic content, and the implications of this for media content creators, advertisers and consumers” (p 2). The key concerns of the inquiry, as per the Terms of Reference are:

  1. the extent to which platform service providers are exercising market power in commercial arrangements with the creators of journalistic content and advertisers
  2. the impact of platform service providers on the level of choice and quality of news and journalistic content to consumers
  3. the impact of platform service providers on media and advertising markets
  4. the impact of longer-term trends, including innovation and technological change, on competition in media and advertising markets, and
  5. the impact of information asymmetry between platform service providers, advertisers and consumers and the effect on competition in media and advertising markets.

The Inquiry

Public submissions will be open until 3 April 2018. The preliminary report is due by 3 December 2018 with the final report to be provided to the Treasurer by 3 June 2019.

The inquiry, as outlined in the terms of reference, is focussed on digital platforms. The inquiry defines ‘digital platforms’, also described as ‘platform services’, as “digital search engines, social media platforms and other digital content aggregation platforms” (p 5). As such, the inquiry will investigate such platforms as Instagram, Facebook, Google, Apple News and Twitter.

The scope of the inquiry is further refined to questions of:

  • News and journalistic content of import to Australian consumers;
  • The level of choice and quality, particularly of news and journalistic content being provided to consumers; and
  • Media and advertising services.

While the ACCC is accepting submissions from key stakeholders such as consumers, media organisations, digital platforms, advertising agencies and advertisers, the inquiry has already raised a number of concerns that the ACCC will be further looking into as the inquiry progresses. 

One concern raised by the inquiry with regard to digital platforms is the reduction in funding for quality news and journalistic content in Australia, as outlined in pages 8-9 of the issues paper:

“Access to a plurality of high-quality news and journalistic content benefits Australian consumers by enabling them to make informed judgments on the issues of the time and to effectively participate in a democratic society. Yet the growth of digital platforms and their increasing share of advertising revenue has challenged the business models of traditional media companies, particularly those reliant on advertising revenues such as newspaper publishers and broadcasters. A key concern is that lower advertising revenues are impeding the capacity of traditional media companies to fund the production and distribution of news and journalistic content.”

Other concerns outlined by the issue paper include: the issue of data collection by digital platforms and whether such platforms are according users with adequate levels of privacy and data protection; as well as the impact of algorithms on news diversity in digital media.

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