In its final report on the Digital Platforms Inquiry, the ACCC made 23 recommendations affecting competition, consumer, media, copyright and privacy regulation which would see Facebook and Google facing new laws and codes targeting data practices and relationships with news media businesses. The proposals would also ensure greater ongoing scrutiny and regulation of Facebook and Google. Some of the recommended changes also affect other businesses.
The Government “accepts the ACCC’s overriding conclusion that there is a need for reform [and] … also accepts that there is a need to develop a harmonised media regulatory framework.” However, the Government will hold a 12-week consultation on the “precise form of the reforms” and intends to finalise its response to the report by the end of 2019.
The ACCC’s inquiry focused on three types of digital platforms: online search engines, social media platforms and other digital content aggregation platforms. Google and Facebook are the two largest digital platforms in Australia. Therefore, the ACCC’s inquiry focused largely on Google and Facebook. The ACCC did not consider other digital platforms such as online marketplaces (including Amazon) but strove to ensure its recommendations were adaptable to other digital platforms where appropriate.
Many of the ACCC’s recommendations dealt expressly with data. These recommendations spanned privacy law, merger law and proposed new laws. The ACCC recommended that the OAIC develop an enforceable privacy code of practice specifically for digital platforms to enable proactive and targeted regulation of their data practices. The ACCC also recommended strengthening consent requirements in privacy laws, to require a clear affirmative act of consent that is freely given, specific, unambiguous and informed. Therefore, any settings for data practices relying on consent must be pre-selected to ‘off’. It also means that different purposes of data collection, use or disclosure must not be bundled. Another recommendation was to clarify that “personal information” captures technical data such as IP addresses, device identifiers, location data, and any other online identifiers that may be used to identify an individual. The ACCC also proposed broader reform of Australian privacy laws, including considering whether to revise the Privacy Act to offer ‘an adequate level of data protection’ to facilitate overseas data flows to and from the EU. The ACCC recommended changes to merger laws to expressly require consideration of the nature and significance of assets, including data and technology, being acquired. The ACCC suggested that a prohibition on “certain unfair trading practices” should be introduced, to help address particular data practices that may have a particularly detrimental impact on Australian consumers.
The ACCC recommended that “designated digital platforms” should each develop and implement a code of conduct to govern their relationships with news media businesses, including commitments to share data and negotiate fairly how to share revenue where the digital platform obtains value from content produced by news media businesses. Another proposal is that digital platforms with more than one million monthly active users in Australia should implement an industry code for handling complaints about fake news on digital platforms. The ACCC’s recommendations also include a new platform-neutral regulatory framework for all entities involved in content production or delivery in Australia, including digital platforms.
If the ACCC’s recommendations are adopted, Google faces losing the default status of its search engine and browser on Android devices in Australia.
The ACCC also proposed that it set up a specialist digital platforms branch within the ACCC for monitoring, investigation, enforcement, conducting inquiries (eg into ad tech and online advertising services), compelling information and making recommendations.
However, the ACCC did not recommend that Google be broken up into separate divisions (eg separating its search engine from its advertising). The ACCC also did not recommend that digital platforms should be governed by the same regulations as media companies.
The ACCC’s recommendations are explored further below.
Consumers — privacy, unfair contract terms, “unfair trading practices”
- Develop enforceable OAIC privacy code specifically for digital platforms — regulate data practices: The ACCC recommends that the OAIC develop an enforceable code of practice, in consultation with industry stakeholders, to enable proactive and targeted regulation of digital platforms’ data practices (DP Privacy Code). The code should apply to all digital platforms supplying online search, social media, and content aggregation services to Australian consumers and which meet an objective threshold regarding the collection of Australian consumers’ personal information. It should be enforced by the OAIC and carry the same penalties that apply to an interference with privacy under the Privacy Act. The ACCC should be involved in developing the code. The DP Privacy Code should address issues arising from data practices of digital platforms, eg information requirements, consent requirements, opt-out controls, children’s data, information security, retention period and complaints-handling: Recommendation 18.
- Strengthen privacy laws:
- Increase penalties: The ACCC recommends increasing the penalties for interfering with privacy under the Privacy Act to mirror the increased penalties for Australian Consumer Law breaches.
- Entitle individuals to sue for compensation: The ACCC recommends giving individuals a direct right to bring actions and class actions against APP entities in court to seek compensation interfering with their privacy.
- Strengthen consent requirements and pro-consumer defaults: Require consent to be obtained whenever a consumer’s personal information is collected, used or disclosed by an APP entity, unless the personal information is necessary to perform a contract with the consumer, is required under law, or is necessary for an overriding public interest reason.
Valid consent should require a clear affirmative act that is freely given, specific, unambiguous and informed (including about the consequences of providing or withholding consent). Any settings for data practices relying on consent must be pre-selected to ‘off’. Different purposes of data collection, use or disclosure must not be bundled. If the personal information of children is collected, consents must be obtained from their guardian. It may be appropriate to not require consent when personal information is processed according with a contract with the consumer. It may also be appropriate to use standardised icons or phrases for certain categories of consents.
- Strengthen notification requirements: The ACCC recommends requiring all collection of personal information to be accompanied by a notice from the APP entity collecting the personal information (whether directly or indirectly), unless the consumer already has this information or there is an overriding legal or public interest reason.
The notice must be concise, transparent, intelligible, easily accessible, clear and plain, provided free, and clearly set out how the APP entity will collect, use and disclose the consumer’s personal information. If the personal information of children is collected, the notice should be readily understandable by the youngest permitted digital platform user. It may be appropriate to use multi-layered notifications or standardised icons or phrases
- Clarify that “personal information” definition captures technical data: The ACCC recommends clarifying that the definition of ‘personal information’ captures technical data such as IP addresses, device identifiers, location data, and any other online identifiers that may be used to identify an individual.
- Enable the erasure of personal information: Require APP entities to erase a consumer’s personal information without undue delay on request from the consumer, unless the retention of information is necessary to perform a contract with the consumer, is required under law, or is necessary for an overriding public interest reason: Recommendation 16.
- Reform privacy law more broadly — remove exemptions, higher standards, protect inferred information, standards for de-identification, facilitate data flows to EU, certification, objectives: The ACCC recommends broader reform of Australian privacy laws to ensure it effectively protects consumers’ personal information in light of increasing data collection. This includes considering whether to remove exemptions for entities (eg small businesses, employers, registered political parties), whether to set a higher standard of privacy protection (eg requiring all use and disclosure of personal information to be by fair and lawful means), whether to protect inferred information (particularly if it includes sensitive information about an individual’s health, religious beliefs, political affiliations), whether there should be protections or standards for de-identification, anonymisation and pseudonymisation of personal information, whether to revise the Privacy Act to offer ‘an adequate level of data protection’ to facilitate overseas data flows to the EU, whether to introduce a third-party independent certification scheme, whether the objectives of the Privacy Act should place greater emphasis on privacy protections for consumers (eg against misuse of data and empowering informed choices): Recommendation 17.
- Introduce statutory tort for serious invasions of privacy: The ACCC recommends introducing a statutory cause of action for serious invasions of privacy. It should require privacy to be balanced against other public interests, such as freedom of expression and freedom of the media. It will increase the accountability of businesses for their data practices and give consumers greater control over their personal information: Recommendation 19.
- Prohibit (and penalise) unfair contract terms: The ACCC recommends that unfair contract terms should be prohibited (not just voidable). This would mean that civil pecuniary penalties apply to the use of unfair contract terms in any standard form consumer or small business contract: Recommendation 20.
- Prohibit certain unfair trading practices — address detrimental data practices: The ACCC recommends that certain unfair trading practices should be prohibited. The scope of such a prohibition should be carefully developed, defined and targeted, with legal safeguards and guidance: Recommendation 21.
This prohibition would help address particular data practices that may have a particularly detrimental impact on Australian consumers.
Media – monetisation and commercial relationships
- Implement ACMA-approved codes to govern relationships between designated digital platforms and news media — including negotiation of revenue sharing: The ACCC recommends that “designated digital platforms” should each develop (within nine months) and implement a code of conduct to govern their relationships with news media businesses. Each code should ensure platforms treat news media businesses fairly, reasonably and transparently, and commit to sharing data; giving early notification of changes to the ranking or display of news; not impeding news media businesses’ opportunities to monetise their content appropriately, and fairly negotiating how to share revenue (or compensate news media businesses) where the digital platform obtains value (directly or indirectly) from content produced by news media businesses.
In close consultation with the ACCC, the Australian Communications and Media Authority (ACMA) will publish guidelines about how codes should be developed and what should be included. ACMA will designate the digital platforms that will be required to implement a code; review and approve the codes (after consulting news media businesses), including approving the duration of the code; and enforce the codes. ACMA should have investigative and information gathering powers, the capacity to impose sufficiently large sanctions, and the ability to require specific amendments of codes. Digital platforms must demonstrate that they have consulted fully with news media businesses in drafting their code. If a digital platform cannot submit an acceptable code to ACMA within nine months of designation, ACMA should create a mandatory standard for that designated digital platform: Recommendation 7.
These codes are designed to address the imbalance in the bargaining relationship between designated digital platforms and news media businesses and recognise the need for value sharing and monetisation of content.
- Implement mandatory take-down code to remove copyright content from digital platforms: The ACCC recommends that a mandatory industry code be implemented to govern take-down processes, to ensure the effective and timely removal of copyright–protected content from digital platforms in Australia. The code should be enforced by the ACMA and have appropriate sanctions and penalties. ACMA should develop the code in consultation with rights holders and digital platforms. The code should include a cooperation framework to proactively identify and prevent copyright infringement (including an appropriate division of responsibility); communication measures (including requirements for agents of digital platforms to be available during Australian business hours and broadcasting of key Australian live events); reasonable timeframes (particularly for removal of live commercial broadcasts); bulk notification mechanisms for repeated infringements; sanctions for users who commit multiple or regular infringements; streamlined measures to prove copyright ownership (particularly for joint-authorship): Recommendation 8.
Media — regulatory framework
- Implement new platform-neutral regulation for all entities producing or delivering content: The ACCC recommends the development and implementation of a new platform-neutral regulatory framework for all entities involved in content production or delivery in Australia, including media businesses, publishers, broadcasters and digital platforms. The goal is to create a level playing field to promote competition in media and advertising markets. The framework should include clear, format-neutral, adaptable guiding principles; the determination of the appropriate extent of regulation, self-regulation and co-regulation; a national uniform classification scheme across formats; consistent advertising restrictions across delivery platforms (online and offline); and appropriate monitoring and enforcement with meaningful sanctions. This reform should be approached in stages. This recommendation is described as a “harmonised media regulatory framework”: Recommendation 6.
- Implement code to handle complaints about fake news on digital platforms: The ACCC recommends that digital platforms with more than one million monthly active users in Australia should implement an industry code of conduct to govern the handling of complaints about disinformation (inaccurate information created and spread with the intent to cause harm) relating to (or presented as) news and journalism on their services. The code should only apply to complaints about disinformation that meet a ‘serious public detriment’ threshold. The code should outline suitable responses to complaints (including the take-down of particularly harmful material). The code should be registered with and enforced by an independent regulator (eg ACMA) that is given information-gathering powers and can impose sufficiently large sanctions, provide frequent public reports and annual reports to government. The code should also consider appropriate responses to malinformation (information inappropriately spread by bad-faith actors with the intent to cause harm, particularly to democratic processes). If an acceptable code is not submitted to the regulator within nine months of an announced government decision, the regulator should introduce a mandatory industry standard. The code should be reviewed by the regulator after two years, and it should make recommendations about whether it should be amended, replaced with an industry standard, or replaced or supplemented with more significant regulation: Recommendation 15.
- Monitor steps by digital platforms to signal credibility of news: The ACCC recommends that an independent regulator (eg ACMA) should monitor the voluntary initiatives of digital platforms to enable users to identify the reliability, trustworthiness and source of news featured on their services. The regulator should be empowered to obtain information from digital platforms, publicly report findings and make recommendations if these initiatives are ineffective: Recommendation 14.
Market power of digital platforms
- Change merger law — extra merger factors including data: The ACCC recommends changes to Australia’s merger laws to include additional merger factors to expressly require consideration of the likelihood that the acquisition would result in the removal of a potential competitor, and the nature and significance of assets, including data and technology, being acquired (directly or not): Recommendation 1.
The ACCC noted that the acquisition of startups by large digital platforms could potentially remove future competitive threats, and increase their access to data, further entrenching their market power. However, this recommendation isn’t expressly limited to digital platforms.
- Agree on an advance notification protocol for acquisitions: The ACCC recommends that the ACCC and each large digital platform agree to a protocol to alert the ACCC of any proposed acquisitions that may impact competition in Australia. Each protocol would specify the types of acquisitions needing notification (including any minimum transaction value), and the minimum advance notification period prior to completion. If such a commitment were not forthcoming, the ACCC will make further recommendations to the government: Recommendation 2.
- Allow Android users to choose search engine and browser: The ACCC recommends Google should enable Australian users of Android devices to choose their default search engine and internet browser from various options. This is being rolled out in Europe. If Google does not do so within six months, the ACCC will propose that the government consider compelling Google to do so: Recommendation 3.
Specialist branch within ACCC & inquiry into advertising
- Establish specialist digital platforms branch of ACCC for enforcement etc: The ACCC recommends setting up a specialist digital platforms branch within the ACCC to develop expertise in digital markets and algorithms to proactively monitor and investigate anti-competitive conduct and conduct harming consumers by digital platforms (which impact consumers, advertisers, news media or other businesses); enforce competition and consumer laws; compel information; conduct inquiries (including extended public inquiries covering at least five years) and make recommendations: Recommendation 4.
- Inquire into ad tech and advertising services: The ACCC recommends that the proposed specialist digital platforms branch should hold an 18-month inquiry into competition for supplying ad tech services and online advertising services by advertising and media agencies. The inquiry should consider: lack of transparency, prices, the share of advertising expenditure retained by service suppliers, any potential excessive margins, processes for buying these services (eg auction and bidding), the relationship between suppliers and customers, the extent that company structures or contracts limit competition, and the impact of consolidation of services on competition. The inquiry should be empowered to compel information: Recommendation 5.
- Develop minimum internal dispute resolution standards for digital platforms: The ACCC recommends that ACMA should develop minimum internal dispute resolution standards to apply to digital platforms, setting out requirements for the visibility, accessibility, responsiveness, objectivity, confidentiality and collection of information of digital platforms internal dispute resolution processes. They should set out the processes for continual improvement, accountability, charges and resources. All digital platforms that supply services in Australia, and have over one million monthly active users in Australia, should be required to comply with the standards. Once published, relevant digital platforms will have six months to comply. ACMA will deal with breaches of the standards, and have investigative and information gathering powers and the capacity to impose sufficiently large sanctions: Recommendation 22.
- Establish ombudsman to resolve complaints and disputes with digital platform providers: The ACCC recommends the establishment of an independent ombudsman scheme to resolve complaints and disputes between consumers/businesses and digital platforms. ACMA and the ombudsman will determine the nature of complaints and disputes that would be subject to the scheme. At a minimum, it should cover complaints or disputes from businesses about the purchase or performance of advertising services and complaints or disputes from consumers, including about scams and the removal of scam content. The ombudsman should be able to compel information, make decisions that are binding on digital platforms, order compensation and compel digital platforms to take down scam content. The ACCC recommends investigation of the feasibility of the Telecommunications Industry Ombudsman taking on this role. If it is not feasible, then a standalone ombudsman should be created: Recommendation 23.
Funding for journalism and digital media literacy
- Provide stable, adequate funding to ABC and SBS: The ACCC recommends that stable and adequate funding should be given to public broadcasters (the ABC and SBS) to support public interest journalism: Recommendation 9
- Provide funding grants for local journalism: The ACCC recommends that the Regional and Small Publishers Jobs and Innovation Package ($20m per year) should be replaced with a targeted platform-neutral grants program ($50m per year) that supports the production of original local and regional journalism (including about local government and courts). The program should be administered at arm’s length from the government, with eligibility criteria designed by an independent expert committee. The government should review this program after three years and determine whether to expand it to other areas of public interest journalism: Recommendation 10.
- Change tax to encourage charitable support for journalism: The ACCC recommends establishing new categories of charitable purpose and deductible gift recipient (DGR) status for not-for-profit organisations that create, promote or assist public interest journalism: Recommendation 11.
- Improving digital media literacy in the community: The ACCC recommends establishing a government program to fund and certify non-government organisations to deliver digital media literacy resources and training through community centres, libraries, schools and seniors centres: Recommendation 12.
- Consider approach to digital media literacy in schools: The ACCC recommends that the Terms of Reference for the 2020 review of the Australian Curriculum should include consideration of the approach to digital media literacy education in schools: Recommendation 13.
The ACCC is investigating particular conduct of certain digital platforms which are alleged contraventions of the Australian Consumer Law (ACL) or the Competition and Consumer Act 2010 (CCA). The ACCC expects to conclude the investigations later in 2019. These investigations include:
- Misuse of market power — access restrictions on app developer: whether access restrictions imposed by a digital platform on a third-party app developer raise issues under s 46 of the CCA
- Google’s representations about users’ control over location data collection: whether Google’s representations to some users about the control they have over Google’s collection of location data, raise issues under the ACL
- Facebook’s representations about its services and terms allowing data sharing: whether representations made by Facebook (and/or its related entities) in relation to the nature of its services and the scope of its terms and condistions, including terms and conditions that allowed user data to be shared with third parties, raise issues under the ACL
Future directions: Data portability
The ACCC will revisit the applicability of the Consumer Data Right to digital platforms in the future. This will occur in the ordinary course as it considers which sectors the Consumer Data Right regime may apply to in the future. It could also make recommendations to government, through its proposed specialist digital platforms branch.
- ACCC, Digital platforms inquiry – executive summary, 26 July 2019 (including a List of Recommendations on p 30)
- ACCC, Digital platforms inquiry – final report, 26 July 2019
- ACCC media release, ‘Holistic, dynamic reforms needed to address dominance of digital platforms’, 124/19, 26 July 2019
- ACCC, Media Conference
- Media release, The Hon Josh Frydenberg MP (Treasurer), The Hon Paul Fletcher MP (Minister for Communications, Cyber Safety and the Arts), ‘Release of the ACCC digital platforms report’, 26 July 2019
- Business Insider Australia, Jack Derwin, Aleks Vickovich, ‘The Australian government just dropped its big report into big tech — here’s what it means for Google and Facebook’, 26 July 2019.