SYDNEY • Australia said it will establish the world's first dedicated office to police Facebook and Google as part of reforms designed to rein in the US technology giants, potentially setting a precedent for lawmakers elsewhere in the world.
The move tightens the regulatory screws on the online platforms, which have governments from the United States to Europe scrambling to address concerns ranging from anti-trust issues to the spread of "fake news" and hate speech.
Australian Treasurer Josh Frydenberg said the US$5 billion (S$6.8 billion) fine imposed on Facebook in the US this month for privacy breaches showed that regulators were now taking such issues extremely seriously.
"These companies are among the most powerful and valuable in the world," Mr Frydenberg told reporters in Sydney yesterday after the release of a much-anticipated report on future regulation of the dominant digital platforms.
"They need to be held to account, and their activities need to be more transparent."
Canberra will form a special branch of the Australian Competition and Consumer Commission (ACCC), the anti-trust watchdog, to scrutinise how the companies use algorithms to match advertisements with viewers, giving them a stronghold on the main income generator of media operators.
The new office is one of 23 recommendations in the ACCC's report, including strengthening privacy laws, protections for the news media and a code of conduct requi-ring regulatory approval to govern how Internet giants profit from users' content.
Mr Frydenberg said the government intended to "lift the veil" on the closely guarded algorithms the companies use to collect and monetise users' data, and accepted the ACCC's "overriding conclusion that there is a need for reform".
The proposals will be subject to a 12-week public consultation process before the government acts on the report, he added.
Google and Facebook have opposed tighter regulation, while traditional media owners - including Mr Rupert Murdoch's News Corp - have backed reform.
News Corp's local executive chairman, Mr Michael Miller, welcomed the "strength of the language and the identification of the problems", and said the publisher will work with the government to ensure "real change".
Facebook and Google said they will engage with the government during the consultation process, but had no comment on the specific recommendations.
The companies previously rejected the need for tighter regulation, and said the ACCC had underestimated the level of competition for online advertising.
ACCC chairman Rod Sims said the regulator had five investigations of the two companies under way, and "I believe more will follow".
He said he was shocked at the amount of personal data the companies collected, often without the knowledge of users.
"There needs to be a lot more transparency and oversight of Google and Facebook and their operations and practices," he said.
Among other recommendations in the report, the ACCC said it wanted privacy laws updated to give people the right to erase personal data stored online, aligning Australia with some elements of the European Union's General Data Protection Regulation.
"We cannot leave these issues to be dealt with by commercial entities with substantial reach and market power. It is really up to government and regulators to get up to date and stay up to date in relation to all these issues," said Mr Sims.
While the regulator did not recommend breaking up the technology giants, Mr Sims also did not rule it out.
"If it turns out that... divestiture is a better approach, then that can always be recommended down the track," he said.