Google and Facebook have been under scrutiny by Australia’s competition regulators. The Australian Competition and Consumer Commission (ACCC) is currently analysing whether Google and Facebook have been abusing their influence online. Other media companies have seen a significant drop in advertising revenue, but is this due to anti-competitive practices?
It is estimated that Google and Facebook hold 84% of global ad revenue, something the ACCC is keen to dismantle if it finds that there is foul play involved. ACCC chairman Rod Sims made it clear that this was in the interest of ‘consumers, media content creators, and advertisers’. Anti-competition caused by monopolies can stunt innovation and growth, but an article in the Financial Times notes that market dominance isn’t applicable to the likes of Google and Facebook.
Instead, the giants are imposing high prices and barrier to entry. The ACCC will inquire into how low prices in one area can lead to monopoly profits in another.
The authorities are not simply singling out Google and Facebook – this investigation is part of a wider media clampdown. The ACCC explicitly stated that it will analyse ‘search engines, social media platforms, and other digital content platforms’. The sector has failed globally to deliver attractive profits in 2017, which in part prompted the regulators’ attention. The ACCC claim that they are not going after the Silicon Valley companies, but are carrying out routine checks on the industry.
The ACCC should however take special measures when dealing with Google and Facebook. Google holds 95% of the search market in Australia. Facebook meanwhile has 15 million active users, or 60% of the population.
The preliminary report is expected to be published next year.