Facebook, Google and other technology giants' role in spreading fake
news stories and diverting advertising away from traditional media will
be put under the microscope after the government directed the
competition regulator to undertake an inquiry into digital
platforms.
The Australian Competition and Consumer Commission had been
asked to scrutinise major digital platforms and their impacts on
media, journalism and advertising, ACCC chairman Rod Sims said
on Monday.
Lawyers from Facebook, Twitter, and Google started two days of
hearings on how Russia allegedly used their services to try to sway
the 2016 US elections.
This will include digital search engines, social media platforms and
digital content aggregators.
Because the inquiry has been formally directed by the government,
rather than self-initiated, the regulator has the ability to use
compulsory information-gathering powers and hold hearings.
"The ACCC goes into this inquiry with an open mind and will study how
digital platforms such as Facebook and Google operate to fully
understand their influence in Australia," Mr Sims said.
While companies like Facebook and Google were likely to be the biggest
focus, he said platforms such as Twitter could also come under the
umbrella.
As the companies predominantly operate overseas, obtaining information
could prove contentious but he didn't anticipate a legal fight.
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"We believe our information-gathering powers capture them even if
they're located offshore because the test is that they do business in
Australia," Mr Sims said.
The inquiry would largely centre on market power and misleading
information. While "fake news" would be part of this discussion, it
wouldn't be the main focus, he said.
"When you're getting news articles, do you know enough about how
they're fashioned for you?" he said.
It would also look at whether advertisers were aware of the full range
of information, potentially including how audience metrics and other
data were provided.
The impact of the tech giants on the choice and quality of news and
journalism available to the public, and long-term trends such
as innovation and technological change, would also be looked at, along
with information asymmetry, where one company or user has more
information than another.
A Facebook spokeswoman said the primary use of the platform was to
connect with friends and family, speak to communities of interest and
connect with organisations and public figures.
"Whilst the sharing of news and entertainment content is only a small
part of the content shared on our services, we take our role in the
media ecosystem very seriously and invest significantly in products that
support publishers," she said.
"We look forward to a thorough inquiry into the Australian media
market."
The launch of the inquiry is part of the Turnbull government's
Broadcast and Content Reform package, whose aim is to help support jobs
and media diversity. It was part of a deal with the Nick
Xenophon Team to secure its support for the government's
media ownership and regulation bill in September.
Mr Xenophon has formerly said Facebook did not move fast enough to remove fake news, and
described Google and Facebook as causing a "haemorrhaging" of local
media companies.
Earlier in the year, then-senator Xenophon, Sam Dastyari, Scott Ludlam,
and Jacqui Lambie backed a Senate inquiry into the future of journalism to
examine the structure of newsrooms and tax arrangements and the increase
of "fake news".
A key line of the new inquiry will be advertising expenditure
in print newspapers, which has been in decline for years as advertisers
look for alternative, and often digital, ways to reach audiences.
Concerns about the pressure tech giants put on traditional media and
marketing companies was also reflected in Zenith's Advertising
Expenditure Forecasts report, released on Monday.
By 2018, internet advertising in Australia was anticipated to account
for 50 to 60 per cent of the total advertising spend, Zenith
Australia chief executive Nickie Scriven said.
"Google and Facebook are the main benefactors of this growth and this
is likely to continue to 2020," she said.
The ACCC is expected to distribute an issues paper outlining
matters relevant to the inquiry and calling for public
submissions.
Public and private hearings would then be held in 2018. It hopes
to hear from content creators, mainstream and small media operators,
platform providers, advertisers, journalists, consumers and small
business interest groups.
A preliminary report will be prepared by December 2018, with the
final report anticipated by June the following year.