Aussie newspapers smell blood as ACCC outlines inquiry into Facebook, Google

Google bullies paywalled news providers, News Corp boss says.
ACCC chairman Rod Sims: Considering the longer-term impacts of digital platforms and the ability of traditional media to remain financially viable

Traditional media outlets in Australia are cheering a decision by a regulator to investigate digital platforms.

The inquiry by the ACCC (Australia’s equivalent of New Zealand's Commerce Commission) will look into the influence of the likes of Facebook and Google on the media advertising landscape and, by extension, much of the news media.

The regulator has proposed it investigate:

• whether digital platforms have bargaining power in their dealings with media content creators, advertisers or consumers and the implications of that bargaining power;

• whether digital platforms have impacted media organisations’ ability to fund and produce quality news and journalistic content for Australians;

• how technological change and digital platforms have changed the media and advertising services markets, and the way consumers access news; and

• the extent to which consumers understand what data is being collected about them by digital platforms, and how this information is used.

“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,” ACCC chairman Rod Sims says.

Mixed results
Previous inquiries have had mixed results, from the standpoint of those barracking against the tech multinationals.

An investigation into profit-shifting saw Australia become one of the first countries to introduce a so-called “Google tax” (similar legislation is now before New Zealand’s Parliament; it has already inspired Google to change its invoicing model).

However, in another hot-button dispute, over interconnection fees for mobile payments, the ACCC sided with the multinational Apple over local banks.

Bullying paywalled news providers
The Australian has been one of the papers egging the ACCC on.

“In the media, Google is destroying the journalism model. Its dominance of search leaves publishers no choice other than to be on Google. It has the digital distribution model, and journalism needs to be discoverable,” News Corp executive chairman Michael Miller writes in a guest editorial today.

“But Google is much more than just a search engine, just as Facebook is more than a vehicle for friends to connect. Together they are also the world’s dominant advertising companies: 85c in every digital advertising dollar goes to Google and Facebook, and this is growing.”

Mr Miller cites how the Wall Street Journal learned “how brutally Google punishes those who challenge its rules” when it began limiting the content it provided for free: In just one month, its referrals from Google News plunged 94%.

“This bullying – to further increase Google’s ad revenue – harms the viability of publishers, threatens jobs and affects communities that could lose local news services,” he says.

Taking submissions
The ACCC is taking submissions on the scope of its digital platforms inquiry until April 3. An issues paper is online here.

The Commerce Commission did not immediately respond to a request for comment on whether it planned a similar investigation here [UPDATE: A spokeswoman for the Commerce Commission says "The Commission does not have the same ability to undertake public inquiries that the ACCC has. We would also only consider investigating particular instances of trader conduct.]

The Kiwi watchdog typically keeps a watching brief on ACCC inquiries and is now formally intertwined with the Australian regulator (one of the ACCC's seven Commissioners, Sarah Court, is a cross-appointee who also sits on our ComCom, while ComCom chairman Mark Barry is an associate member of the ACCC).

In its decision to block the Fairfax-NZME merger, the ComCom generally played down the influence of Facebook and Google — although Fairfax and NZME also failed to make a compelling case that they would have any more hope in fighting the digital platform behemoths if they joined forces.

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