The Federal Government has instructed the ACCC to launch an inquiry into the effect search engines and social media platforms have on competition in media and advertising.
“The ACCC goes into this inquiry with an open mind to and will study how digital platforms such as Facebook and Google operate to fully understand their influence in Australia,” ACCC Chairman Rod Sims said.
“We will examine whether platforms are exercising market power in commercial dealings to the detriment of consumers, media content creators and advertisers.”
Sims says the ACCC will look closely at longer-term trends, and the effect of technological change on competition in media and advertising. The ACCC will also consider the impact of “information asymmetry” between digital platform providers and advertisers and consumers.
According to the ACCC, advertising expenditure in print newspapers has been in decline for “a number of years”. Recent ACCC merger reviews show most advertisers are spending less on print newspapers and finding alternative ways of reaching target audiences – including through digital media.
“As the media sector evolves, there are growing concerns that digital platforms are affecting traditional media’s ability to fund the development of content,” Mr Sims said. “Through our inquiry, the ACCC will look closely at the impact of digital platforms on the level of choice and quality of news and content being produced by Australian journalists.”
The ACCC says by holding an inquiry under Part VIIA of the Competition and Consumer Act (2010), the organisation “can use compulsory information gathering powers and hold hearings to assess the level of competition in a market”.
“We are keen to hear the views of content creators, mainstream media outlets and smaller media operators, platform providers, advertisers, journalists, consumers and small business interest groups,” Mr Sims said.
The ACCC is expected to produce a preliminary report early December 2018, with a final report due early June 2019.