Watchdog to probe Google, Facebook impact


It wants to know if the long-term shift to digital news is unfairly limiting conventional publishers' ability to produce content, and whether the "information asymmetry" between internet services, advertisers and the public is damaging.

The Australian government ordered the inquiry in September, as part of a larger media law reform effort, brought on by concerns about the state and quality of journalism in the country, where 2,000 media jobs have been cut since 2011. Its announcement was welcomed by NXT senator Stirling Griff.

In the USA, lawmakers grilled Facebook, Google and Twitter last month over how foreign nationals used social media platforms to spread misinformation during the 2016 presidential election.

Traditional media companies have been squeezed by online rivals and suffered a sharp drop in advertising revenues.

The ACCC is now undertaking inquiries into the supply of retail electricity, the supply of and demand for wholesale gas in Australia, the supply of insurance in Northern Australia, residential mortgage products, and the dairy industry.

"The digital duopoly do not bear all the responsibility for the media's current woes, but they also need to accept that their hands are not clean."

The two will also capture the majority of growth in forecast digital growth in the next few years, further consolidating their market power across the globe, which the agency said represented "exceedingly bad news" for their competitors.

The inquiry will consider the impact of such sites on media and advertising markets, as well as the level of choice and quality of news for consumers.

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The inquiry is formally directed by the government, meaning that the ACCC is allowed to use compulsory information-gathering powers and hold hearings to gain insight into the digital platforms.

It is looking for submissions from content creators, mainstream media outlets and smaller operators, platform providers, advertisers, journalists, consumers and small business interest groups. A preliminary report will be published early December 2018, with a final report due early June 2019.

Facebook and Google's impact on the media industry is coming under scrutiny in Australia.

Representatives for both companies said they will be cooperating with the ACCC on its inquiry.

Google said in a statement, "We look forward to engaging with this process as relevant".

A Facebook spokesperson looked to downplay its role in content creation and promotion.

Those deals are said to be costing Facebook hundreds of millions. Facebook added that they take the role of media ecosystem seriously and they are ready for the probe.