The Federal Government has today formally directed the ACCC to commence an inquiry into digital platform providers such as Facebook and Google.

The ACCC’s inquiry will look at the effect that digital search engines, social media platforms and other digital content aggregation platforms are having on competition in media and advertising services markets.

“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.”

“The ACCC will look closely at longer-term trends and the effect of technological change on competition in media and advertising,” Mr Sims said.

“We will also consider the impact of information asymmetry between digital platform providers and advertisers and consumers.”

Advertising expenditure in print newspapers has been in decline for a number of years. Recent ACCC merger reviews have shown that 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.”

By holding an inquiry under Part VIIA of the Competition and Consumer Act (2010), the ACCC 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. Further information, including the terms of reference, is at www.accc.gov.au/digital-inquiry

Background

The ACCC will soon distribute an issues paper outlining matters relevant to the inquiry, and will be calling for public submissions. The ACCC will conduct public and private hearings next year and details will be released in due course.

The ACCC is currently 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 ACCC has also recently completed a  market study into cattle and beef markets, and market studies into the new car retailing industry and the communications sector are underway.