26 February 2018

ACCC Digital Platforms discussion paper

The Australian Competition and Consumer Commission (ACCC) has released an issues paper as part of its public inquiry into the impact of digital platforms on media and advertising markets in Australia.

The ACCC is seeking feedback on
  •  Whether digital platforms have bargaining power in their dealings with media content creators, advertisers or consumers and the implications of that bargaining power. 
  • Whether digital platforms have impacted media organisations’ ability to fund and produce quality news and journalistic content for Australians 
  • How technological change and digital platforms have changed the media and advertising services markets, and the way consumers access news 
  • The extent to which consumers understand what data is being collected about them by digital platforms, and how this information is used 
  • How the use of algorithms affects the presentation of news for digital platform users. 
The ACCC is seeking submissions by 3 April 2018 and will issue a preliminary report into its findings in December 2018, with a final report by 3 June 2019.

As part of the inquiry the ACCC will use its compulsory information gathering powers to obtain information from digital platforms and media organisations that is not publicly available.

The discussion paper features the following questions -
1.1. Which digital platforms do you consider to be relevant to this Inquiry? 
1.2. Should the Inquiry consider digital platforms that do not currently provide access to news and journalistic content in Australia but may either provide news and journalistic content in the future and/or have an impact in relevant markets (e.g. Amazon,1 instant messaging applications)? 
1.3. What ‘news and journalistic content’ is particularly relevant to this inquiry? Should the ACCC consider a broad range of specialist suppliers of news and journalistic content? 
1.4. Should the Inquiry focus on news and journalistic content supplied to consumers in Australia or news and journalistic content produced in Australia? 
1.5. What are appropriate metrics for measuring the choice and quality of news and journalistic content? 
1.6. Are there any other issues relevant to the choice and quality of news and journalistic content that should be considered by the ACCC? 
3.1. What are the relevant media and advertising services markets for this Inquiry? Who are the key market participants? 
3.2. What are the relevant markets for assessing the market power of digital platforms? Who do digital platforms compete with? 
3.3. How should the market power of digital platforms be assessed? What are appropriate metrics for measuring any market power (e.g. market concentration, profits, prices, number of users, access to user data)? 
3.4. Do digital platforms have market power? If so, which digital platforms and in which markets? In particular:
(a) What realistic alternatives are available to users (i.e. consumers, advertisers and media content creators) of digital platforms? Do these alternatives effectively constrain the behaviour of digital platforms? 
(b) Do users use multiple digital platforms for similar functions? Do you have any evidence or observations on switching between platforms or the growth of new platforms? 
(c) What difficulties do users encounter in switching between platforms? Do digital platforms engage in behaviour that makes switching between platforms more costly or more difficult for users? 
(d) Does increasing the number of users increase the attractiveness of that digital platform for other users? Does this mean that it is only viable for one or two digital platforms providing a similar service to consumers to operate at the one time? 
(e) What difficulties are faced by providers in establishing competing platforms? Does the threat of new entry limit the market power of digital platforms? Over what timeframe should the threat of new entry be assessed?  
(f) Are there examples where digital platforms have engaged in behaviours that indicate the exercise of market power? What types of users are most at risk from any exercise of market power by digital platforms? 
3.5. Do digital platforms engage in any behaviour that enhances their market position by excluding competitors or potential competitors, e.g. through the acquisition of rivals or restrictive contract terms? 
3.6. Describe the nature of any impacts (positive and negative) that digital platforms are having on media content creators? What causes these impacts? Are these impacts temporary or ongoing? 
3.7. What are the advantages and disadvantages for media content creators of using digital platforms to publish or distribute their content? 
3.8. What terms and conditions do digital platforms offer media content creators to publish or distribute their content? How do they differ from those offered by other distributors of media content? Do digital platforms offer different terms to different media content creators? 
3.9. Have digital platforms changed the price, quality or choice of media content for Australian consumers? If so, what are the implications of this for media content creators? For example, how easily can media content creators offer access to subscriber only content via digital platforms and how readily can they obtain brand attribution for content accessed via digital platforms? 
3.10. Do digital platforms have access to user data that is helpful to media content creators (e.g. readership statistics)? Does this access to user data create any information asymmetry between digital platforms and media content creators and, if so, how does this impact competition in the relevant markets? 
3.11. If so, how much do media content creators value access to such user data? How does the access to or control over user data impact the relationship between digital platforms and media content creators? For instance, how transparent are digital platforms about how content reaches consumers via their algorithms and how much notice do media content creators receive when significant changes are made? 
3.12. How important are digital platforms in delivering audience (and revenue) to media content creators relative to total audience and revenue? 
Implications for advertisers 
3.13. Describe the nature of the impacts (positive and negative) that digital platforms are having on advertisers? What causes these impacts? Are these impacts temporary or ongoing? 
3.14. What are the advantages and disadvantages of using advertising services offered by digital platforms for advertisers (i.e. advertising agencies and businesses directly advertising on digital platforms)? 
3.15. What terms and conditions do digital platforms offer advertisers? How do they differ from those offered by other suppliers of advertising services? Have digital platforms changed the price, quality or choice for advertisers? If so, what are the implications of this for advertisers? 
3.16. Do digital platforms have access to user data that is helpful to advertisers (e.g. return on investment statistics)? Does this access to user data create any information asymmetry between digital platforms and advertisers and, if so, how does this impact competition in the relevant markets? 
3.17. How much do advertisers value digital platforms’ access to user data? How does the access to or control over user data impact the relationship between digital platforms and advertisers? 
Implications for consumers 
3.18. Describe the nature of the impacts (positive and negative) that digital platforms are having on consumers? What causes these impacts? Are these impacts temporary or ongoing? 
3.19. What are the advantages and disadvantages of using digital platforms for consumers? 
3.20. What terms and conditions govern consumers’ use of digital platforms? How do they differ from those which apply when consumers obtain news and journalistic content from other sources? 
3.21. Are consumers generally aware of these terms and conditions? Specifically, do Australian consumers understand the value of the data they provide, the extent to which platforms collect and use their personal data for commercial purposes, and  how to assess the value or quality of the service they receive from the digital platforms? 
3.22. Have digital platforms changed the price of media content supplied to Australian consumers? 
3.23. If you consider the collection of data part of the effective price paid by consumers for use of the digital platforms, to what extent are consumers aware of and provide informed consent for the collection and use of their data? 
3.24. Have digital platforms changed the quality or choice of media content supplied to Australian consumers? Has the use of algorithms to select content changed the diversity of news supplied to consumers? 
3.25. How do consumers value digital platforms’ access to their data? Do consumers see it as a cost or a benefit (e.g. it enables customisation of the content displayed)? How does the access to or control over user data impact the relationship between digital platforms and consumers? 
3.26. How have the channels used by Australian consumers’ to access news and journalistic content (e.g. TV, newspapers, social media, search engines) changed in the past five to ten years? How will this change in the next five to ten years? 
3.27. How have the types of news and journalistic content accessed by Australian consumers’ changed in the past five to ten years? How will this change in the next five to ten years? 
3.28. How has Australian advertising expenditure changed over time? In particular, how have digital platforms impacted the advertising revenue of media companies, especially those involved in the supply of news and journalistic content, and how have media markets responded? 
3.29. Have innovation and technological change increased or decreased competition in the media and advertising services markets? 
3.30. Have the markets that digital platforms operate in changed over time and are they likely to change further in the future? For example, to what extent can digital platforms now be considered to be publishers rather than distributors of content, and is this likely to evolve in the future? 
3.31. How are the business models for news and journalism likely to evolve over the next decade and how sustainable is the commercial provision of high quality news in Australia? Do you have any other comments or observations on the impact of digital platforms or on the state of competition in the media and advertising services markets? 
3.32. Attachment B summarises the key existing regulation in Australia that applies to the media and advertising services markets. Are there any additional existing or proposed laws or regulations in Australia which should be taken into account by the ACCC in this inquiry? 
3.33. How do existing laws and regulations apply to the conduct of digital platforms? For example:

  • are digital platforms required to verify news and journalistic content before distributing it? 

  • do intellectual property and copyright laws apply to the conduct of digital platforms in a similar way as to other market participants?
If these laws and regulations do not apply to digital platforms, what are the implications for competition in the media and advertising services markets and how does this impact the quality and choice of news and journalistic content for consumers? 
3.34. Should digital platforms be subject to the same laws and regulations as other market participants in the media and advertising services markets (e.g. news and journalistic content creators or distributors)? 
3.35. What steps have been taken by digital platforms to address any competition and consumer concerns that have been raised (e.g. self-regulatory codes or guidelines). To what extent have these initiatives addressed concerns? 
3.36. Are the existing laws and regulations sufficient to address the activities of digital platforms? Is there a case for the specific regulation of digital platforms and, if so, what issues would proposed regulation seek to address?
Attachment B will be of particular interest for privacy and media students.