Australian watchdog opens Facebook, Google market-power inquiry

The Australian Competition and Consumer Commission has launched an official inquiry into the likes of Google and Facebook to see whether digital platforms are having an adverse effect on competition in the media and advertising industries.

Specifically naming the duopoly in its announcement, the ACCC said it is looking into “whether platforms are exercising market power in commercial dealings to the detriment of consumers, media content creators and advertisers”. The scope includes search engines, social-media platforms and content aggregators.

To be clear, neither Facebook nor Google, nor any other platform, is under investigation for any wrongdoing. The inquiry affords the commission compulsory information-gathering powers, as well as the ability to hold public and private hearings, to study the level of competition in the advertising and media markets.

The commission is looking to hear from all sides of the industry, including mainstream media, content creators, advertisers, platforms and consumers. Should the ACCC find there are competition issues, it could then take further action and open an investigation.

“The ACCC goes into this inquiry with an open mind to and will study how digital platforms such as Facebook and Google operate to fully understand their influence in Australia,” ACCC chairman Rod Sims said.

In response to the inquiry, Google said: “We look forward to engaging with this process as relevant."

A Facebook spokesperson said that while sharing news and entertainment content “is only a small part” of the content shared on Facebook, the company takes its role in the media ecosystem “very seriously and invest[s] significantly in products that support publishers”.

"We look forward to a thorough inquiry into the Australian media market," the spokesperson said.  

With publisher advertising revenues in massive decline and digital advertising spend being overwhelmingly cornered by Google and Facebook, the investigation comes at a time when many are querying the influence of the duopoly in advertising, marketing and media.

Sims said: “As the media sector evolves, there are growing concerns that digital platforms are affecting traditional media’s ability to fund the development of content.” 

A preliminary report is expected by December 2018, with the ACCC’s full findings to be published in June 2019.