Australia Looks to Rein in Power of Facebook and Google
December 10 2018 - 02:50AM
Dow Jones News
By Rob Taylor
SYDNEY--Australia's antitrust regulator called for measures to
curb the influence of Facebook Inc. and Alphabet Inc.'s Google in
news and advertising and warned that a tech-sector watchdog may be
needed to prevent abuses of power.
The Australian Competition and Consumer Commission, delivering
its report at the end of a yearlong inquiry into digital media,
proposed changes to merger laws to protect smaller tech firms and
said major companies should offer more search and browsing choices
for consumers. That could have implications for Apple Inc., which
offers Safari as a default on its devices.
The regulator's report broadens the international challenges
facing tech companies including Google and Facebook amid heightened
scrutiny of how they handle sensitive data in other markets. Last
week, the U.K. Parliament released a trove of internal Facebook
emails that show Mark Zuckerberg and other executives pursuing
hard-nosed tactics to stifle competitors.
One of the ACCC's top criticisms was a lack of transparency in
how tech companies use algorithms to rank online inquiries. That
opaqueness could warrant the establishment of a watchdog to ensure
tech companies aren't abusing their power, the ACCC said.
Apple didn't immediately respond to the report. A spokeswoman
for Google said the report had looked at "important topics in
relation to Australia's changing media and advertising industry." A
Facebook spokesman said the company is reviewing the ACCC's
analysis and recommendations.
Australian Prime Minister Scott Morrison set up the inquiry last
year in his former role as the country's treasurer. The probe was
tasked with examining the impact of tech platforms on the loss of
journalism jobs and a sharp fall in advertising dollars flowing to
traditional media from $1.4 billion to $140 million between 2001
and 2016. The regulator was also asked to look into tax
arrangements, amid concern of profit-shifting by overseas-based
multinationals.
The ACCC said Facebook accounted for 46% of Australian display
advertising revenue, including via its fast-growing photo-sharing
app Instagram. Google accounted for around 94% of online searches
in the country.
The ACCC report is preliminary, with a final report due after
Australia holds a national election in May. It will then fall to
the next government to decide whether to enact any recommendations.
Still, the ACCC said it would be sharing its findings with
regulators and other groups overseas, including the Organization
for Economic Cooperation and Development.
Among its other recommendations, the regulator called for
changes to merger law to prevent Google and Facebook using their
dominance to buy up rivals. That would include an examination of
whether deals would further concentrate personal data in their
hands.
Tech firms passively collected data from online browsing and
used it to assemble detailed profiles that could be accessed by
advertisers or third parties, the inquiry found, as happened with
Cambridge Analytica using Facebook data during the U.S.
presidential election.
That could warrant changes to Australia's Privacy Act to give
consumers more control over their data, backed up by penalties on
companies that breach the law, the ACCC said.
Write to Rob Taylor at rob.taylor@wsj.com
(END) Dow Jones Newswires
December 10, 2018 02:35 ET (07:35 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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