The Government Digital Platforms Inquiry Explained

Should we all be freaking out about the ACCC Platforms Inquiry? Are email and permission-based marketing about to change forever?

Who will be affected the most? Who will win and who will lose? Well, let us bring you up to speed about what’s happened, what is happening and how to prepare yourself so that you don’t see half your database and marketing strategy go out the window overnight.

Early August, the Australian Competition & Consumer Commission (ACCC) released their long-awaited report on the Digital Platforms Inquiry.

The report was aimed at levelling the playing field for Australian businesses and ensuring tech-giants are playing by Australian consumer competition and data privacy rules.

Along with the report, there was a 30-minute press release filmed live. But here at MI Academy, we know you’ve got better things to do and we live to serve, SO. We’re bringing the most important things directly to YOU.

According to the report:

Each month, approximately 19.2 million Australians use Google Search, 17.3 million access Facebook, 17.6 million watch YouTube (which is owned by Google) and 11.2 million access Instagram (which is owned by Facebook).

‘Australians’ use of Google and Facebook’, Digital Platforms Inquiry

To put that in context, there are 21 million Aussies over the age of 13. We’re talking about a very large portion of the population accessing these platforms almost daily 😱 So yes…this report matters!

Back to it, at the centre of the report were two key questions.

  • Do Google and Facebook hold substantial power in crucial digital markets?
  • Does this power pose a risk to competitive processes?

Spoiler alert: both questions were answered with a big fat, YES!

“In part we were shocked, but it’s just the enormity of the issue that we all have to grapple with that had really come home to us after this 18-month enquiry.”

Rod Sims, ACCC Chairman

We’re shocked too. Well, kind of. Shocked about how out of touch our privacy laws are and that this is the first time our government is really understanding it in detail. We’re not saying it’s as bad as the old “We sell Ads Senator” debacle in the US. But it was a surprise to see finally how little politicians know about modern data practises… Anyway, during the press release, ACCC Chairman Rod Sims specifically addressed seven harms identified in the report.

These are basically 7 WTF moments brought to you by Facebook and Google. We’ve summarised them here for you 👇🏽.

How Facebook and Google are Negatively Impacting the Competitive Landscape: Seven harms

1. Market Power

If the digital world were a game of Monopoly, the wider technology landscape would be the equivalent of the unfortunate player holding the Old Kent Road card, with Google and Facebook stacking the hotels high on Mayfair and Park Avenue. Boo! 👎🏽

Source: via GIPHY.How every game of Monopoly ends…

It’s no joke that Google and Facebook hold insane market power. I mean there are very few businesses in the world that could cop a 5 billion USD fine from the Fair Trade Commission, pay it, and continue with business as usual.

But Facebook can, and this is just a small window into the extreme market power these platforms hold. Just a 5 BILLION DOLLAR slap on the wrist, no biggy!

The report scarily shows how both Facebook and Google have discovered a way to effectively monetise attention and data to keep a firm grip on market power and quash any platforms that dare compete.

One case in the report revealed how Google broke competition law when they misused market power to quash Australian advertising start-up, Unlockd.

2. The Illusion of Data Privacy

We don’t even come close to understanding the sheer amount of data both Facebook and Google hold— considering their algorithms are notoriously private. And it’s likely to stay this way, thanks to the privacy guidelines which Sims refers to as, “Long, complex, vague, and difficult to navigate.”

Both platforms have mastered the art of creating an illusion of privacy. They put on a caring front, however, if you were to go through the statements with a fine-toothed comb you would find that they are actually data permission statements in disguise.

‘Sign this dotted line so we can use and abuse your data!’….they pretty much read.

Not only are the vague and confusing, but the policies also push a ‘take it or leave it’ mentality. Either you sign over your data, or you severely limit your use of the platform.

Now I think of it, it’s much like Australia’s ‘no hat, no play’ rule! 🤠

3. The Gatekeeper

In the app store alone, 87% of apps send data to Google and 43% send data to Facebook, giving both an insane hold over any business wishing to operate on the platforms.

In this sense, they essentially serve as gatekeepers with enormous power to disadvantage any current or future competitors. Coupled with their intense market power, both platforms have the ability to restrict or completely block web traffic to their competitors.

Facebook and Google are basically the Gandalf of the digital world.

4. Consumer Trust in Data

Let’s wind things back to 2018 when we in the midst of the Facebook Cambridge Analytica scandal. No idea what I’m talking about? You can read about it here.

Also read: How to Cover Your Brands Arse if Everyone Starts Deleting Facebook.

In a nutshell, Facebook was doing some dodgy things with their users’ private data and it came as a cruel wake-up call to the general public.

But as much as we talk about the Dark Side of Data, there are also many positive uses, which are threatened by our dwindling trust.

As consumers become more aware, they may withdraw from a data economy or simply input the wrong information.

We need trust in data to truly reap the benefits of a data-focussed society and future. Tech juggernauts are threatening this trust.

5. Advanced Advertising Targeting

There has always been an element of deception in advertising. I mean, in the ’50s Seven-up was touted as a beverage for babies. HOWEVER, with today’s data targeting, this has been taken up a level (or 10!)

By the way, please don’t feed your baby Seven-up. Unless you’re ready to pay one helluva dentist bill!

With a data bank likely more extensive than our own government, Facebook and Google are able to target the deepest vulnerabilities of the consumer market.

They exploit and target consumer vulnerabilities on a scale that we’ve never seen before, with the sheer amount of output making them practically untouchable in the eyes of Australia’s Advertising Standards Council.

6. The Death of Great Journalism

FAKE NEWS!!!!

We’ve always had ‘fake news’ in some form, so what’s the big deal? WELL! Until now, fake news was reserved for tabloid magazines and forums. It never had a reputable platform.

That’s until Facebook came along.

The goal of the platform is to ‘atomise the news’. They want to attract and keep you on the platform. They don’t want you going to the publisher platform and for this reason, misinformation and disinformation run riot.

According to Pew Research, 67% of Facebook users primarily get their news from the platform.

Pew Research Centre, 2018

But unlike that which we read in the papers, news in the digital realm is not held to the same expectations of accuracy and transparency.

Facebook’s algorithm does not need to abide by media black-out regulations around elections, and largely favours click-baity “news” pieces over costly investigative journalism and well-thought-out pieces.

As a result, many users get stuck in an echo-chamber of inflammatory, unfactual content and proper news sources are really struggling to get eyes on their pieces.

Public Interest Journalism is essential for a well-functioning society and it impacts each and every aspect of our life, that’s why we need to fight especially hard to keep it alive.

7. Opaque Digital Advertising Market

And finally, our last harm. Can it get any worse!?

Through this report, the ACCC has come to completely understand how digital ad-tech works and in the process they’ve discovered some dirty dealings.

“What’s clear is we really don’t know what money goes to the advertisers as compared to the middlemen (Google). Where the ads are placed? Are the clicks real?”

Rod Sims, ACCC Chairman

Like their counterpart, Google recently copped a fine for a breach, theirs totalling to just short of an eyewatering 4 billion AUD. In this case, Google was found guilty of breaking competition law by violating EU antitrust rules across three of their platforms: Google Shopping, Android and AdSense.

According to the Commission, Google abused its market power to award an ‘illegal advantage’ to its own advertisers, something that they’d been getting away with for a while!

Think of it like this. Imagine if one company owned every billboard, in every Australian city. They control who gets exposure, who gets the consumer dollars, and ultimately who succeeds. This is essentially what Google is doing to the online advertising market! Worrying? Oh god yes!

How to Protect Yourself Against a Potential Shakeup

You know what they say about putting all of your eggs in one basket. You should feel the same way about the digital platforms your business uses.

“If we’ve learnt anything from the GDPR in the EU with brands that sat on their hands who lost 80% of their databases.”

Rod Sims, ACCC Chairman

Still wondering what the GDPR is? Head here: The GDPR Explained.

When an inquiry of this magnitude is released, the hope is that we will see change, and it is these changes that may affect the way your business interacts on these platforms and with your client’s data as a whole. This inquiry won’t just affect tech giants but businesses as a whole who keep information about the customers, like email addresses, click behaviour, shopping preferences etc…

Just kidding! It’s not the end of the world!

If Facebook and Google were to be completely shut down tomorrow it would feel like we’d just had a limb amputated. Now we aren’t suggesting that is about to happen; HOWEVER, if the Australian government decides to implement a handful of the recommendations, a shakeup could definitely be on the horizon.

Here are the recommendations we have come up with to help you prepare, unlike those folks who didn’t take the GDPR changes seriously and had 80% of their databases wiped overnight:

  • Build up your databases now (while it’s easy!)
  • Ensure your subscribers and followers are giving clear and explicit consent in regards to permissions to contact. This goes for forms on the website, addresses collected post-purchase, even at wholesale events, and through lead capture software.
  • Are you using a website tracking pixel or cookies? Ensure your website visitors are notified.
  • Review your current marketing Privacy Policy & Terms and Conditions.
  • Take a good look at your existing data handling and management practices. If you don’t have any, it is certainly time to get that in order!

So. My final thoughts…

I really hope we can get somewhere with this, and I truly do believe it will take input from areas of business.

  1. Firstly, the Australian government needs to carefully consider the findings of the report and seriously consider implementing some, if not all, of the ACCC’s recommendations. The whole world is watching us right now. Australia has performed the most in-depth report to date.
  2. With the recommendations in place, it will take a continual commitment from the ACCC to monitor the major digital platforms and call out the big guys when they step out of line, as they will!
  3. As consumers, we need to be aware of the volatility in the digital space. How much data are you giving away? Do you know what it is being used for? Are you aware of your rights in regards to Australia’s Data Privacy Regulations?
  4. Lastly, it’s up to us. The retailers, service providers and business owners of the world. Facebook and Google are setting a horrible standard, but that doesn’t mean we should follow suit. We need to play fairly in the digital space, just as we would in the day-to-day business world.

Are the recommendations enough to create a fair playing field going forward? Well, that’s still yet to be seen. Watch this space!

What do you think? Share your thoughts with us in the comments, or shoot us an email at enquiries@milkit.com.au

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