Digital Platforms

The Commonwealth Government's response to the ACCC Digital Platforms inquiry recommendations states

Our response outlines a roadmap for a program of work and series of reforms to promote competition, enhance consumer protection and support a sustainable Australian media landscape in the digital age. We’ve identified areas for immediate reform as well as those requiring longer term work and further consultation. The implementation roadmap will provide clarity and certainty for business and consumers on our commitments and the timeframe for implementing our response. 

We are pleased to announce our immediate commitment to: • establish a special unit in the ACCC to monitor and report on the state of competition and consumer protection in digital platform markets, take enforcement action as necessary, and undertake inquiries as directed by the Treasurer, starting with the supply of online advertising and ad tech services • address bargaining power concerns between digital platforms and media businesses by tasking the ACCC to facilitate the development of a voluntary code of conduct • commence a staged process to reform media regulation towards an end state of a platform-neutral regulatory framework covering both online and offline delivery of media content to Australian consumers • ensure privacy settings empower consumers, protect their data and best serve the Australian economy by building on our commitment to increase penalties and introduce a binding online privacy code announced in the 2019–20 Budget, through further strengthening of Privacy Act protections, subject to consultation and design of specific measures as well as conducting a review of the Privacy Act.

Through our response, the Government will deliver a regulatory framework that is fit for purpose and better protects and informs Australian consumers, addresses bargaining power imbalances between digital platforms and media companies, and ensures privacy settings remains appropriate in the digital age.

 The document centres on a roadmap for action—responding to the Digital Platforms Inquiry

Digital platforms have changed how people and businesses connect

Australians rely on digital platforms in their everyday lives: to communicate, for entertainment, to learn, to undertake research, to buy goods and services and run their business. In a given month, around 19.2 million people in Australia use Google Search, 17.3 million use Facebook, 17.6 million use YouTube, and 11.2 million use Instagram. Many Australians access these services daily for long periods of time, spending an average of 23 minutes a day on Google (excluding YouTube) and half an hour a day on Facebook.

Digital platforms are an essential input to modern business, helping to improve performance and lift productivity through lower costs, access to new markets and the ability to tailor goods and services. More than half of all small businesses in Australia have a Facebook page and many use Google to promote their services.

Data is the resource that powers much of this activity, and it is being created and collated at an unprecedented scale. The capacity to process this data is also improving, providing us with greater insights and information than ever before. While the benefits of digital services and technology are vast and will continue to grow, we must also be aware of, and respond appropriately to, the risks that are presented so that consumers and businesses have the confidence and capacity to engage in the digital world.

These changing dynamics require new approaches to regulation

The business models of digital platforms, their global nature and the pace that digital technologies and services evolve and iterate challenge our existing regulatory frameworks.

The ACCC’s Digital Platforms Inquiry (DPI) was a ground-breaking study into the competitive impacts of global digital platforms on the news media and advertising sectors in Australia. The ACCC found digital platforms to be an important innovation that has fundamentally changed the way media content is produced, distributed and consumed, and that Facebook and Google have grown rapidly to become the dominant players in important online markets in Australia. This dominance is underpinned by the volume of data these companies gather and control.

The ACCC also found that Google and Facebook have become unavoidable business partners for media companies to both access an audience for their content and secure advertising revenue.

The Government accepted the overriding conclusion was that there is a need for reform—to better protect consumers, improve transparency, recognise power imbalances and ensure that substantial market power is not used to lessen competition in media and advertising services markets.

The final report contained 23 wide-ranging recommendations that relate to competition, consumer protection, privacy and media regulatory reform. Several of the recommendations are proposed to be economy-wide or require significant structural changes to existing regulatory frameworks.

The Government is already taking action

Several of the ACCC’s recommendations align with existing commitments.

The Government announced in March 2019 that it will consult on draft legislation to amend the Privacy Act to increase maximum civil penalties to match penalties under the Australian Consumer Law, and to require the development of a binding privacy code that will apply to social media platforms and other online platforms that trade in personal information. Under the legislation, the binding privacy code, which will be developed by the Office of the Australian Information Commissioner (OAIC), will require these entities to be more transparent about data sharing; to meet best practice consent requirements when collecting, using and disclosing personal information; to stop using or disclosing personal information upon request; and include specific rules to protect personal information of children and vulnerable groups. The Government will release the draft legislation for consultation, and subsequent to consultation, introduction of legislation and the development of the code is to occur in 2020.

The ACCC’s report acknowledges the work already underway to strengthen protections in the Australian Consumer Law as a positive step to deter questionable data practices by businesses and protect individuals’ personal information. In March 2019, the Government committed to further strengthen unfair contract term protections for small business and will shortly consult on a Regulation Impact Statement, which will cover a range of policy options. These include making unfair contract terms illegal and attaching civil penalties to breaches; revising the definition of a small business; broadening the coverage of small business contracts; and clarifying the definition for a standard form contract.

The Review of the Australian Consumer Law finalised in 2017 recommended further work to explore how an unfair trading prohibition could be adopted in the Australian context to address potentially unfair business practices. Following agreement of consumer affairs ministers, this work commenced in 2019 through Consumer Affairs Australia and New Zealand (CAANZ).

These commitments build on other Government initiatives designed to promote news and journalism and keep Australians safe online.

More than $60 million over three years is being invested in quality regional journalism through the Regional and Small Publishers Jobs and Innovation Package (the Package). The Package is designed to help small metropolitan and regional publishers adapt to the challenges facing the contemporary media environment, create employment opportunities for cadet journalists and support regional students to study journalism.

The Government is implementing the recommendations of the Taskforce to Combat Terrorist and Extreme Violent Material Online through which digital platforms and internet service providers agreed to undertake substantive actions. Consistent with the Christchurch Call to Action, the Government is also working internationally and through the actions agreed to drive concrete initiatives on preventing terrorist and violent extremist exploitation of the internet.

Getting the settings right—the forward work program

In response to the ACCC’s inquiry, the Government has developed a reform roadmap to ensure competition, consumer protection and a sustainable Australian media landscape. The Government’s role is not to protect domestic businesses from digital competition, but rather to ensure the proper functioning of markets and a fair approach to regulation that ensures the rules of the physical world apply equally to the digital world.

Some of the recommendations can be addressed rapidly, while others will need further consideration and engagement given the complexity of the issues and the potential to have whole-of-economy effects.

Ensuring appropriate consumer protections

It is important that Australians have the confidence and capacity to engage with the opportunities that digital platforms can offer. This confidence comes from the ability to determine the trustworthiness and source of information they access online, trust in how their data is collected and used, and clear and transparent processes for having their complaints about digital platforms heard.

Consultation on the Privacy Act reforms announced in March 2019 will also seek input on amending the definition of ‘personal information’ in the Privacy Act to capture technical data and other online identifiers; strengthening existing notice and consent requirements to ensure entities meet best practice standards; and introducing a direct right of action for individuals to bring actions in court to seek compensation for an interference with their privacy under the Privacy Act.

While consultation confirmed there is general satisfaction with the Privacy Act’s principles-based, technology neutral approach, it is also appropriate to consider how the scope of the Privacy Act applies and fits in the digital age and the adequacy of enforcement arrangements. The Government will commence a review of the Privacy Act to ensure it empowers consumers, protects their data and best serves the Australian economy.

A review will identify any areas where consumer privacy protection can be improved, how to ensure our privacy regime operates effectively for all elements of the community and allows for innovation and growth of the digital economy. The review will also allow for further consultation on the ACCC’s reform proposals to enable consumers to request the erasure of their personal information.

There is growing global recognition of the need for citizens to be equipped to engage critically with online news and information sources in light of the increased prevalence of ‘fake news’ and disinformation. Online services, including digital platforms, play a key role in aggregating and disseminating this content.

The risks posed by disinformation and an erosion of news quality highlight the importance of collective and coordinated action by industry, civil society and governments. This includes the creation of a strong and sustainable news media ecosystem alongside educational initiatives for citizens to improve their ability to engage critically with online news and information sources.

The Government recognises the need to balance any interventions that might target media literacy and disinformation with rights to freedom of expression and speech. It is important that Australia’s approach aligns with and supports global initiatives.

The Government will ask the major digital platforms to develop a voluntary code (or codes) of conduct for disinformation and news quality. The Australian Communications and Media Authority (ACMA) will have oversight of the codes and report to Government on the adequacy of platforms’ measures and the broader impacts of disinformation.

The codes will address concerns regarding disinformation and credibility signalling for news content and outline what the platforms will do to tackle disinformation on their services and support the ability of Australians to discern the quality of news and information. The codes will be informed by learnings of international examples, such as the European Union Code of Practice on Disinformation. The Government will assess the success of the codes and consider the need for any further reform in 2021.

The Government is committed to protecting Australians online – this includes protecting businesses and consumers in the digital economy. While complaints handling frameworks are well established in other essential service areas, it is clear from the ACCC report that digital platform users appear to have limited options to resolve complaints.

The Government will develop a pilot external dispute resolution scheme, the outcomes of which will inform whether to establish a Digital Platforms Ombudsman to resolve complaints and disputes between digital platforms and individual consumers and small businesses using their services.

There is also merit in requiring digital platforms operating in the Australian market to demonstrate that they have internal dispute resolution processes which provide a clear, transparent avenue for people to pursue concerns with service providers before needing to escalate concerns to an external dispute resolution mechanism. This means that internal and external dispute resolution processes need to be complementary and tightly integrated.

The Government will assess the development and rollout of the pilot scheme over the course of 2020, along with any parallel improvements in associated internal dispute resolutions processes. This will inform the Government’s consideration of the need for a broader external dispute resolution process, including a Digital Platforms Ombudsman, in 2021.

Promoting competition and improving market transparency

Effective competition is essential for a strong business sector, better consumer outcomes and a strong economy. While digital platforms such as Google and Facebook are key pioneers in developing and popularising the online services they provide, their dominance of markets for the supply of these services creates competition risks.

The DPI was established in response to concerns about an imbalance of bargaining power between digital platforms and Australian media companies. The final report examines the competitive impacts and implications of their existing commercial relationships, in particular the role of online advertising in the dissemination and monetisation of news content and the long term impacts on the sustainability of the news media sector. It is clear from the ACCC’s report that the commercial relationships between these businesses are highly complex and there is a two-way value exchange at play, with news media providers and digital platforms both benefiting from the distribution of news content.

The Government agrees that the digital platforms need to do more to improve the transparency of their operations for news media providers as they have a significant impact on the capacity of news media organisations to build and maintain an audience and derive resources from the media content they produce.

The Government will address bargaining imbalances between digital platforms and news media businesses by asking the ACCC to work with the relevant parties to develop and implement a voluntary code to address these concerns.

The ACCC will provide a progress report to Government on code negotiations in May 2020, with codes to be finalised no later than November 2020. Any code will be considered binding on the parties who elect to sign up to it. If an agreement is not forthcoming, the Government will develop alternative options to address the concerns raised in the report and this may include the creation of a mandatory code.

Digital services, like those offered by digital platforms, operate in complex, technical markets based on rapidly evolving technology. There is a widely recognised need for competition regulators to develop and maintain expertise to keep up with these changes.

The Government will ensure that there is continued vigilance in digital platforms markets by funding the ACCC to continue to examine competition and consumer protection issues involving digital platforms.

In the 2019–20 Mid-Year Economic and Fiscal Outlook we are committing $27 million over four years for a Digital Platforms Branch within the ACCC. The Branch will monitor and biannually report on digital platforms, take enforcement action as necessary, and conduct inquiries as directed by the Treasurer, starting with an inquiry into competition for the supply of ad tech services and the supply of online advertising by advertising and media agencies.

The ACCC has proposed amendments to merger law to signal the importance of considering whether proposed mergers would remove a potential competitor and the nature and significance of the assets being acquired. The Government will commence a broad consultation process on the proposed amendments in 2020, noting that courts may already consider these matters in merger cases and that the proposed changes would affect businesses across the Australian economy and not just digital platforms. 

The ACCC has noted that Google is rolling out options in Europe to enable Android users to choose their default internet browser and search engine. The ACCC, through its Digital Platforms Branch, will monitor the impact of the changes in Europe and provide further advice to the Government. 

Safeguarding the media landscape 

The ACCC provided a detailed analysis of existing media regulatory frameworks and the differing requirements on traditional media businesses, such as free-to-air television, and on businesses which compete with them, such as internet-based content platforms.

The Government will commence a staged process to reform media regulation towards an end state of a platform-neutral regulatory framework covering both online and offline delivery of media content to Australian consumers. This is a large and complex reform, so we will work through the detail carefully, dividing the work into a number of stages, as the ACCC recommends, and consulting with affected stakeholders at each stage.

Commencing in 2020 our immediate focus will be on: • developing a uniform classification framework across all media platforms; • the extent of Australian content obligations on free-to-air television broadcasters (including drama and children’s content), and whether there should be Australian content obligations on subscription video-on-demand services; and • other aspects of the policy framework to support Australian film and television content.

In early 2020, the Government will release an options paper co-authored by Screen Australia and the Australian Communications and Media Authority that will look at how to best support Australian stories on our screens in a modern, multi-platform environment.

The second phase of reform, to commence later in 2020, will include a review of the advertising rules and restrictions across all delivery platforms, consideration of mechanisms to monitor and enforce the regulatory framework across all platforms, and other measures to remove redundant legislation and implement a coherent legal framework for consumers and for industry participants. The Government will make announcements about the details and process for the second phase measures once the process for phase one has concluded.

The Government recognises that public interest journalism is important to Australia’s democracy, and local and regional journalism is essential in informing and strengthening local communities. A sustainable and adaptable media sector is necessary to support the provision of such journalism.

The Government will enhance the Regional and Small Publishers Jobs and Innovation Package to better support the production of high quality news, particularly in regional and remote areas of Australia, with a particular focus on the production of public interest journalism that is at greatest risk of being under-provided.

The Government is committed to maintaining the health and vibrancy of the Australian Broadcasting Corporation (ABC) and the Special Broadcasting Service (SBS). The provision of nearly $3.2 billion and $887 million respectively, over the next three years, represents a substantial investment of public funds in our national broadcasters and will enable the ABC and SBS to provide television, radio and digital media services that fulfil their respective Charters.

Australia’s copyright system is critically important to our economy and our creative industries. An effective copyright framework underpins the work of Australian artists, musicians and creators, and balances the rights of these groups to generate a return on their investments with reasonable access to copyright works.

Enforcing copyright against digital platforms can be challenging. The Government does not support pursuing a mandatory take-down code managed by the ACMA, noting the concerns of both major copyright owners and users, and the potential unintended effects of a code across a diverse copyright market. To get the settings right, more data and further consultation with a broader range of copyright stakeholders, digital platforms and consumer groups is needed to determine appropriate options for reducing the availability of infringing material on digital platforms.

The Government committed to reviewing copyright enforcement reforms made in 2018 and this review will occur in late 2020. In the meantime, there are opportunities for copyright owners to continue to enhance their relationships with digital platforms and work to identify where and how improvements could be made to reduce infringing copyright material and promote access to quality Australian content.

The Government will not be making further changes to the tax settings to support public interest journalism at this time. There are a number of existing ways in which organisations that produce public interest journalism can seek deductible gift recipient (DGR) status and the Government’s current focus is on implementing the DGR reforms announced in December 2017 before considering further changes.

The Roadmap highlights -

Work in progress 

Recommendations 16(f) and 18: Developing legislation for public consultation to increase penalties under the Privacy Act to match Australian Consumer Law and require development of a binding online privacy code. The draft legislation will be released for consultation and subsequent to consultation introduced to Parliament in 2020. 

Recommendation 20: Consultation on a range of policy options to strengthen unfair contract term protections for small businesses from late 2019. 

Recommendation 21: Further work underway through Consumer Affairs Australia and New Zealand on how an unfair trading prohibition could be adopted in the Australian context to address potentially unfair business practices. 

Immediate actions 

Recommendations 4 and 5: Establish a new unit within the ACCC to monitor and biannually report on competition and consumer protection in digital platform markets, take enforcement action as necessary, and undertake an inquiry into the supply of ad tech services and online advertising. 

Recommendation 6: Stage 1 – work closely with affected stakeholders, and the ACMA, in addressing the priority reform areas • developing a uniform classification framework across all media platforms; • the extent of Australian content obligations on free-to-air television broadcasters (including drama and children’s content), and whether there should be Australian content obligations on subscription video-on-demand services; and • other aspects of the policy framework to support Australian film and television content. 

Recommendation 7: The ACCC to work with digital platforms and news media businesses to facilitate the development of a voluntary code to address bargaining power imbalances between these parties. 

Recommendations 16(a), (b), (c) and (e): The Government will consult on these recommendations during consultation on the Government’s Privacy Act amendments announced in March 2019 to increase penalties under the Privacy Act to match Australian Consumer Law penalties and require development of a binding online privacy code. 

Recommendation 17: Commitment to a review of the Privacy Act to ensure it empowers consumers, protects their data, and best serves the Australian economy. 

Work over 2020 

Recommendation 1: Undertake public consultation on the proposed amendments to mergers law. 

Recommendation 5: ACCC to deliver preliminary report on the ad tech inquiry. 

Recommendation 6: Stage 2: • A review of advertising rules and restrictions across all delivery platforms • Consideration of mechanisms to monitor and enforce the regulatory framework across all platforms; and • Other measures to remove redundant legislation and implement a coherent legal framework for consumers and industry participants. 

Recommendation 7: The ACCC to provide a report to Government on the progress of negotiations on a voluntary code between digital platforms and news media businesses by May 2020. The code is to be finalised by November 2020. 

Recommendation 8: Review of Government’s 2018 copyright enforcement reforms , including evaluating opportunities for facilitating online copyright enforcement. 

Recommendation 10: The Government will enhance the Regional and Small Publishers Jobs and Innovation Package to better support the production of high quality news, particularly in regional and remote areas of Australia, with a particular focus on the production of public interest journalism that is at greatest risk of being under-provided. 

Recommendation 12: The Government will develop a proposal to establish a network of experts and organisations to develop media literacy materials around a common framework prioritising students, older adults and other vulnerable people 

Recommendation 13: The Government will seek to have news and media literacy included within the scheduled review of the Australian curriculum. 

Recommendations 14 and 15: The Government will ask the major platforms to develop a code (or codes) of conduct for disinformation and news quality. The ACMA will oversee the development of the codes and assess the adequacy of each platform’s measures. 

Recommendation 17: Review of the Privacy Act commences. 

Recommendation 20: Decision on policy options to strengthen unfair contract terms. 

Recommendation 21: Decision on policy options on an unfair trading prohibition.

Recommendations 22 and 23: Government to work with major digital platforms to scope and implement a pilot external dispute resolution mechanism for complaints between consumers, businesses and digital platforms. 

Work over 2021 

Recommendation 3: Monitor and report back on Google’s rollout of options in Europe to allow consumers to choose their default internet browser and search engine. 

Recommendation 5: ACCC to deliver final report on the ad tech inquiry 

Recommendation 7: ACCC to report on whether the major digital platforms and news media businesses are likely to reach agreement on a suitable code. If sufficient progress has not been made, the Government will develop a proposal to address the outstanding concerns. 

Recommendations 14 and 15: The Government will evaluate the effectiveness of the voluntary code (or codes) of conduct. If the voluntary measures are failing to adequately mitigate the problems of disinformation or news quality online, the Government will consider the need for further actions. 

Recommendation 17: Review of the Privacy Act completed. 

Recommendations 22 and 23: The Government will evaluate the effectiveness of the pilot scheme, subsequent industry-led developments and the outcomes of the ACCC’s inquiry into ad tech services and online advertising agencies to the extent that they relate to the impact of advertising on small business. Taking these matters into account, the Government will consider the merit of establishing a Digital Platforms Ombudsman on an ongoing basis, and the case for further regulatory intervention.