Australia to develop code of conduct for the likes of Facebook, Google

Facebook is grappling with a mushrooming list of challenges while Google was fined by the FTC to settle claims it violated children's privacy on its YouTube platform. PHOTO: AFP

SYDNEY (BLOOMBERG) - Australia will boost the resources of the competition regulator and review privacy laws in an effort to rein in the market dominance of digital giants such as Google and Facebook.

A special unit will be set up within the competition watchdog to monitor digital platforms, starting with a focus on online advertising, Prime Minister Scott Morrison's government said on Thursday (Dec 12).

The Australian Competition and Consumer Commission (ACCC) will work on a voluntary code of practice to address "bargaining power imbalances" between digital platforms and news media companies. And the government will review the Privacy Act to ensure "privacy settings empower consumers, protect their data and best serve the Australian economy".

The government was responding to a sweeping report published earlier this year by the ACCC that called for a regulatory crackdown on technology giants and recommended penalties and deterrents be imposed for inappropriate storage and use of personal data.

Mr Morrison did not address many of the 23 recommendations made by the competition watchdog, and his government said that more time was needed to consider such complex issues.

"I want us to be the model jurisdiction in the world for how we are dealing with digital platforms," Mr Morrison told reporters. "We have regulation and restrictions that were written for an analog economy. If it's wrong in the real world, it's wrong in the digital world."

Regulators worldwide have been trying to loosen the tech giants' grip on everything from advertising and search engines, to news, data and elections.

Facebook, the world's largest social media company is grappling with a mushrooming list of challenges, including federal and state antitrust investigations, criticism of its handling of users' personal information, and dissatisfaction with its treatment of political content.

In July, Facebook agreed to pay US$5 billion (S$6.8 billion) to the Federal Trade Commission (FTC) - the largest privacy fine in the agency's history - to resolve the Cambridge Analytica data scandal in which a consulting firm hired by United States President Donald Trump's campaign obtained data without users' knowledge from a researcher who created a personality quiz app on the social network.

Google was also fined by the FTC to settle claims that it violated children's privacy on its YouTube platform.

In September, a nationwide group of US states opened an investigation into whether Google's advertising practices violate antitrust laws, targeting the heart of the search giant's business.

The ACCC has previously laid bare the control that Alphabet Inc-owned Google and Facebook exert over Australia's 25 million-strong population. At least 94 per cent of online searches in Australia go through Google, the watchdog said in December last year. And each month, 17 million locals access Facebook, 17 million watch Google-owned YouTube, and 11 million access Instagram, which is owned by Facebook.

Among its recommendations, the ACCC called for merger laws to be updated to recognise the importance of data and for stronger action against copyright infringement.

"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," Treasurer Josh Frydenberg said. While some of the ACCC's recommendations will be acted on immediately, "others will need further consideration and engagement given the complexity of the issues and the potential to have economy-wide effects".

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