The Australian Federal Government has launched an official inquiry into ‘digital platform providers’ – such as Facebook and Google – to determine their effect on competition within the media and advertising industry.
ACCC Chairman, Rod Sims, states the inquiry will examine the influence of such digital platforms on Australian media, journalists and consumers:
“The ACCC goes into this inquiry with an open mind and will study how digital platforms such as Facebook and Google operate to fully understand their influence in Australia. We will examine whether platforms are exercising market power in commercial dealings to the detriment of consumers, media content creators and advertisers.”
“The ACCC will look closely at longer-term trends and the effect of technological change on competition in media and advertising. We will also consider the impact of information asymmetry between digital platform providers and advertisers and consumer. Through our inquiry, the ACCC will look closely at the impact of digital platforms on the level of choice and quality of news and content being produced by Australian journalists”
The ACCC’s inquiry falls under Part VIIA of the Competition and Consumer Act (2010), enabling the regulator to compulsorily obtain information and hold hearings to determine competition levels within a market.
The consumer watchdog is expected to release its preliminary report in December 2018, with a final report due early June 2019.
The news follows Roy Morgan’s latest report, affirming that advertising in Australia is increasingly moving online, adding that the majority of consumers consider the internet their go-to source for “purchase-related information”.
Interestingly, Roy Morgan’s latest report reveals that non-digital media channels remain most effective for some media categories – e.g. the use of catalogues are deemed most useful within the grocery and alcoholic beverages industry.
29% of consumers agree that catalogues are “the next best media” (after the internet, and before most non-search websites) for purchasing small electronic devices.
Roy Morgan CEO, Michele Levine, affirms that the disruption caused by digital media does not make other more traditional channels redundant:
“The Internet looms large as the pre-eminent advertising channel with close to 50% of all Australia’s $15 billion plus advertising spend now online, and $3.5 billion of ad spend via Internet search alone (approximately 46% of all online spend) with the balance of Internet spending via Internet display advertising and online classifieds”
“Catalogues are rated highly by consumers for information about selecting children’s wear, purchasing toys, selecting clothing & fashion, purchasing cosmetics & toiletries, purchasing small electrical appliances and purchasing large kitchen/laundry appliances – whilst many consumers turn to magazines for information on Home improvements and renovations, Home interiors and furnishings and Health and fitness products and consumers turn to newspapers for information on new and used motor vehicles, real estate, employment and jobs and entertainment services.”