Economy

Tech giants face call for ombudsman, privacy clampdown

Tech giants face call for ombudsman, privacy clampdown

The recommendation, in a preliminary report on the US firms' market power, is being closely watched around the world as lawmakers wrestle with the powerful tech firms' large and growing influence in public life, from privacy to publishing.

This reflects not merely that this area is the intersection of two of the biggest issues in contemporary capitalism (market dominance and exploitation of private information), but that Google and Facebook are now the 800-pound gorillas in a market that Nine and News Corp used to dominate.

CRA chief executive officer Joan Warner says, "We're pleased that the ACCC's preliminary report has found that action is needed to address the gaping inequalities that exist between regulations applying to radio broadcasters and digital platforms".

The decline of traditional media has seen digital platform grow exponentially in the past decade.

He added that media businesses are "fierce competitors" for exclusive content and are concerned that digital platforms don't necessarily recognise original content and the original source of a piece of content.

Further submissions to the ACCC's digital platforms inquiry will be accepted until February 15, and the final report is due on June 3 next year.

"The inquiry has also uncovered some concerns that certain digital platforms have breached competition or consumer laws, and the ACCC is now investigating five such allegations to determine if enforcement action is warranted", Mr Sims said. Facebook, in particular, has been under increased scrutiny worldwide after a series of scandals around users' data and a proliferation of fake news on its platform. Together the two sites have approximately 46 per cent of Australian display advertising revenue; no other website or application has more than 5 per cent market share.

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In the case of Google and Facebook, for instance, businesses and consumers may simply put up with issues like the lack of transparency around advertising effectiveness and use of personal data because there are no good alternatives.

As the commission points out, Google has substantial market power in online search, search advertising and news referral while Facebook has substantial market power in social media, display advertising and online news referral.

The ACCC also notes that consumers will be better off if they can make informed and genuine choices as to how digital platforms collect and use their data, and proposes changes to the Privacy Act to enable consumers to make informed decisions. "This has implications across society because of the important role the media plays in exposing corruption and holding governments, companies, powerful individuals and institutions to account", Sims said.

The report contains 11 preliminary recommendations and eight areas for further analysis as the inquiry continues.

The moves are created to challenge a transparency issue in how the online platforms rank content, allowing them to unfairly favour businesses with which they have commercial relationships with.

Further stakeholder forums may be held in early 2019.