The Turnbull government has requested for the Australian Competition & Consumer Commission (ACCC) to begin an investigation into Facebook and Google’s power in the media landscape.
The ACCC’s inquiry will look at the impact 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 says.
“We will examine whether platforms are exercising market power in commercial dealings to the detriment of consumers, media content creators and advertisers.”
A Facebook spokesperson tells AdNews while the sharing of news and entertainment content is only a small part of the content shared on its services, it takes its role in the media ecosystem "very seriously" and invests significantly in products that support publishers.
"We look forward to a thorough inquiry into the Australian media market," the Facebook spokesperson says.
A Google spokesperson also tells AdNews: "We look forward to engaging with this process as relevant."
The inquiry will also consider the impact of information asymmetry between digital platform providers and advertisers and consumers and the longer-term trends and the effect of technological change on competition in media and advertising.
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,” Sims says.
“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 tension between Facebook and Google and the wider media industry has been growing this year, following several scandals that have called into question the transparency of the two players.
Google has been hit with several boycotts this year, most recently with Australian brands finding their ads were running against pedophilic content on YouTube, and Facebook's reputation has been under siege following multiple metrics errors.
Part of the inquiry will be to assess the transparency issues surrounding Facebook and Google.
The ACCC inquiry follows a public inquiry into the future of journalism earlier this year, led by senators Sam Dastyari, Scott Ludlam, Nick Xenophon and Jacqui Lambie.
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