Google and Facebook Inc. face a regulatory crackdown in Australia after the nation's competition watchdog joined a chorus of global criticism over their use of data and the market power they wield across news and advertising.
"The inquiry has also uncovered some concerns that certain digital platforms have breached competition or consumer laws, and the ACCC is now investigating five such allegations to determine if enforcement action is warranted", Mr Sims said.
Some of the resulting investigations relate to allegations "that could sit under competition law which would go to issues of misuse of market power" while some relate to "issues of consumer law", Sims told a press conference.
In its preliminary report, the ACCC said while digital platforms had revolutionised the way consumers communicated and accessed news and information and offered many benefits, there were questions about their the responsibility they held as "gateways" to information.
"The ACCC considers that the strong market position of digital platforms like Google and Facebook justifies a greater level of regulatory oversight", said ACCC chair Rod Sims.
Each month, approximately 19 million Australians use Google Search, 17 million access Facebook, 17 million watch YouTube (which is owned by Google) and 11 million access Instagram (which is owned by Facebook).
The ACCC is also considering recommending a plan to stop Google's internet browser - Chrome - being installed as a default browser on mobile devices and computers and its search engine being installed as a default on internet browsers.More news: President Trump Confirms John Kelly Out as White House Chief of Staff
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Other areas identified for further investigation in the ACCC's preliminary report included signalling where news stories came from, obligations to delete users' data, whether users should be able to opt out of targeted advertising, and measures to fund news and journalism in Australia. "Google and Facebook are critical and, in many cases, unavoidable business partners".
The problem for a regulator like the ACCC is that the digital giants' business model is hard to regulate; their market dominance is derived from people's willingness to surrender their data freely, in exchange for the perceived value of being able to look at your sister's baby photos or find things online.
He added that this market dominance and the downturn of ad revenue has led to a cut in the number of journalists over the past 10 years.
The ACCC said consumers should be informed about the manner in which these platforms collect and use their data to create personalized advertising. "This has implications across society because of the important role the media plays in exposing corruption and holding governments, companies, powerful individuals and institutions to account", Sims said.
The Australian Competition and Consumer Commission (ACCC) voiced on Monday its concern over the extent to which Google and Facebook are collecting user data in order to enable target advertising. The ACCC said it is in particular concerned about the length, complexity and ambiguity of online terms of service and privacy policies, including click-wrap agreements with take-it-or-leave-it terms.
The ACCC has requested further feedback on its recommendations and matters for review by 15 February 2019.