ACCC targets Google and Facebook with five investigations underway

Rejecting the idea that the digital giants are merely 'dumb pipes', ACCC chair Rod Sims has said taking them to court lays down rules within which they must operate.
Written by Asha Barbaschow, Contributor

Australian Competition and Consumer Commission (ACCC) chair Rod Sims has used his speech at the Melbourne Press Club to reignite discussions on the market dominance of digital platforms such as Facebook and Google, and at what cost that comes to a consumer's privacy.

In summarising the findings of the 600-page Digital Platforms Inquiry report that was released in late July, Sims said taking the digital platforms to court in Australia or overseas lays down rules within which they must work.

"These are more important than the level of penalties," he said on Tuesday. "Once found to breach a law, it will be very difficult for a digital platform to continue with that behaviour in any effective way."

Sims revealed the ACCC currently has five investigations that are "well advanced".

The ACCC chair pointed to cases in Europe, where the cumulative amount of fines levied by the European Commission against Google currently stands at €8.2 billion, and also the United States, where the Federal Trade Commission slapped Facebook with a $5 billion penalty for violating consumer privacy following the Cambridge Analytica scandal.

See also: Top 5: Ways to protect your privacy (TechRepublic)

In addition to touching on plans to teach the tech giants a lesson, Sims further detailed the market dominance Facebook and Google possess down under, saying the amount of time Aussies spend on those two platforms dwarfs the time spent on rival applications and websites.

He said this gives the companies unparalleled access to Australian audiences.

Each month, approximately 19.2 million Australians use Google Search; 17.3 million access Facebook; 17.6 million watch Google-owned YouTube; and 11.2 million access Facebook-owned Instagram.

"These are not community based, not for profit, companies, no matter how much they seek to portray themselves as benevolent enablers of human interaction and knowledge sharing," Sims told the press club.

"To be clear, Australian law does not prohibit a firm from possessing a substantial degree of market power. Nor does it prohibit a firm with a substantial degree of market power from 'out-competing' its rivals by using superior strategy and efficiency to win customers at the expense of firms that are less strategic or less efficient," he added.

"Our law does not, however, allow companies to use their dominant position to handicap their rivals."

According to the ACCC chair, the dominance of Google and Facebook as a means of distribution has meant many businesses rely on their services to reach customers.

"Such businesses are potentially exposed, given the ability and incentive of digital platforms to favour either their own related businesses, or businesses with which they have a commercial relationship," he said. "The lack of transparency in Google's and Facebook's operations compounds this risk.

"So while they might position themselves as 'dumb pipes', simply the messengers not the message, this portrayal is contradicted by their need to capture and monetise increasing amounts of user attention and data to continue to grow."

See also: Australia wonders how to tax companies cashing in on user-generated content

Sims said everyone should be "very" concerned that the existing regulatory frameworks for the collection and use of data have not held up well to the challenges of digitalisation; nor have they "appropriately responded to the incentives created by the supply of targeted advertising that relies on the monetisation of consumer data and attention".

"Citizens will, and should, demand that governments stay ahead of these issues," he said.

"We remain convinced that our recommendations have got it right."


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