Major media organisations have criticised digital platforms for engaging in anti-competitive trading practices and creating artificial barriers that stifle the ability of local media companies to compete for advertising revenue.
Today, the ACCC published 57 submissions to its inquiry into digital platforms. Most of the major media companies and industry bodies are largely critical of the market domination that Google and Facebook enjoy and are calling for a level playing field.
There is no consensus on whether further regulation is the answer, and one organisation, Fairfax Media, spoke positively about its partnership with Google.
AdNews has summarised the main points from News Corp, Fairfax, Nine, the Australian Association of National Advertisers and Commercial Radio Australia.
Australia's largest newspaper and magazine group, News Corp, warns that digital platforms possess substantial market power and are engaging in anti-competitive practices that prevent publishers line News from competing on merit.
Such practices have the potential to damage the creation, distribution and consumption of news and journalism in Australia, the submission said.
News said that the “anti-competitive” practices of digital platforms has lead to widespread consumer harm because they reduce the choice and diversity of original and quality news and journalism. This undermines the ability of consumers to access credible news by prioritising unreliable content as well as harvesting increasing amounts of personal data for commercial purposes.
The submission said that digital platforms have proven to be unresponsive to criticism and unaccountable for errors and their market power allows them to “control the supply and demand for digital advertising”.
News Corp complained that domination of Google (95% of search and 50% of mobile operating systems market), Facebook (85% of social media market) and Apple's (40% of mobile operating systems market) had entrenched them as intermediaries between publishers and consumers.
This meant they were 'unavoidable trading partners' that imposed 'unfair trading terms and policies', that coerced publishers into using Google's First Click Free (which has been superseded by flexible sampling) and Accelerated Mobile Pages, Facebook's Instant Articles and Apple News.
“Publishers that seek to resist the terms of access to a digital platform are penalised by demotion or exclusion from the platform, resulting in an immediate deterioration in referral traffic. Those that comply with the terms of access are experiencing intense pressure on margins,” the submission added.
News would like a regulatory body set up to provide oversight of the algorithims that digital platforms use.
Australia's oldest news organisation, Fairfax Media, struck a more conciliatory tone on explaining the reasons why its business model was in decline – advertising revenue of its metropolitan mastheads shrinking from $800 million in 1999 to $225 million today – and the commercial opportunities digital platforms provided.
The publisher was positive about its partnership with Google, which it use to sell advertising, but critical of Facebook's commercial partnership opportunities.
For consumers, “Google surfaces content people need in an instant based on a range of signals, including relevance and authority” and “Facebook predicts what people are most interested in and surfaces that content, without the user needing to consciously decide what they want”.
It also points out that the targeting capability of digital platforms delivers “real of perceived efficiencies in advertising spend”.
“Both Google and Facebook have established self-service platforms that enable them to very efficiently service the advertising needs of the long-tail of small businesses. This has created particular challenges for our regional and communities mastheads, which have typically serviced local advertisers.”
Fairfax endorsed its collaboration with Google as a blueprint for success.
“Two of Google’s core businesses – search and programmatic display – are heavily reliant on having quality content on the open web. This potentially creates a meaningful area of overlapping interest with the news industry,” its submission said.
It took a much dimmer view of the social media giant.
“It is our view that Facebook’s commercial interests are largely served by keeping users within Facebook’s environment. The difference between user-uploaded content (e.g. baby photos, viral videos) and professional journalism is less clear in Facebook’s business model.
“As a result, fewer opportunities have emerged to date to work with Facebook to support the viability of our journalism or appropriately recognise the value professionally-created content brings to Facebook’s business model.”
It says that while Facebook encouraged publishers to use products like Instant Articles and native video, the “path to commercialisation” remains unclear.
“Moreover, publishers who choose not to participate often see a subsequent loss of traffic. For example, following the release of Instant Articles newsfeed began to prioritise articles in that format over links to publishers’ owned and operated channels.”
Nine's submission expressed concerns over the pressure social platforms place on the market, particularly around the way creators and distributors of premium content are required to share content.
Nine stated that the terms and conditions digital platforms place on content creators and owners rob the value that content that owners/creators can earn.
The network pointed out the role of digital platforms as the internet's “gatekeepers”, which forces media companies to distribute their content under their rules despite the commercial disadvantages.
Nine said Google's multitude of businesses within its own advertising supply chain has “created a closed or self-reinforcing system.”
Because of this, advertising technologies owned by Nine and other media networks are blocked or barred from entering and expanding within the market.
“Google and Facebook also control critical inventory, thus acting both in the supply chain and as a supplier of advertising space. The only way to buy advertising space on these properties is to use Google’s ad tech platforms. Google’s dominance in the ad tech stack is detrimental not only for competitors in the stack, but also for publishers and advertisers. ” the submission states.
From a consumer perspective, Nine states that regulation is the burgeoning issue for social media platforms and topped its list of concerns. It said that a lack of evenness in regulation creates an unequal playing field for the media companies competing for advertising revenue. It also made note of the damage it will do to the news and information the public receives.
“The content being provided to consumers is not necessarily based on highest relevance or informative quality but may reflect self-interested strategic decisions by the platforms,” the submission stated.
Nine also raised concerns about how digital platforms harvest and use consumer data, saying they are not fully aware of the extent to which their data is collected, collated and used, pointing to recent scandals as evidence.
It believes there is little transparency in how digital platforms collect data or how they use it, such as building profiles of people who may not be users of their service.
Australian Association of National Advertisers (AANA)
The Australian Association of National Advertisers welcomed the increased range of services that digital platforms provide but warned the benefits are tempered by a lack of transparency in measurement and viewability.
In response to the ACCC's inquiry into digital platforms, advertiser's peak body also bemoaned the constraints that advertisers face when using digital media platforms that operate walled gardens, such as Facebook and Google's YouTube.
“The core of this issue is that most digital platforms operate within tight boundaries or walled gardens. Advertisers are constrained to only working within that particular platform’s guidelines which do not allow cross platform benefits,” the AANA response stated.
“A key risk for advertisers is a lack of transparency in measurement and viewability. While digital platforms offer more to advertisers in terms of immediate measurement of campaign results, these measures and results are not independently audited. Nor is there the opportunity to compare across platforms due to the difference in metrics used.”
Self reporting has long been a bone of contention in the media and marketing industry with critics complaining that digital media platforms essentially mark their own homework and use metrics that cannot be compared to other media channels.
This includes a viewability standard that only requires 50% of an ad's pixels to be viewable for a second for static display and two seconds for a video impression to count - an industry wide standard.
The AANA, MFA and IAB Australia have established a working group to design a common set of best-practice operating standards.
In the US, the Media Ratings Council, which set the original digital viewability benchmark that is widely accepted worldwide, is working towards creating a cross-media standard and aims to improve digital viewability standards to 100% of pixels in view to count for an impression.
Commercial Radio Australia
Commercial Radio Australia believes there is an inequality in regulations between digital platforms and other media, digital metrics are misleading and their use of data is “unauthorised and unfair”.
The radio industry body also warned that the near monopolies Google (search) and Facebook (social media) have on the market means they are essentially gatekeeprs of the internet and the a lack of transparency over the algorithm they use potentially reduces diversity and quality of content while creating ‘filter bubbles’ of restricted content, “often with no regard for factual accuracy, balance or diversity of viewpoints”.
“Digital platforms do not properly measure the efficacy of online advertising,” the CRA added. “There is currently no regulatory means of holding such platforms to account nor of forcing transparency regarding their claims of user engagement and audience size.”
Its ACCC submission added: “There is currently a gaping inequality between the regulations applicable to traditional broadcasters compared with digital platforms.”
The CRA believes that digital platforms can “no longer legitimately be considered mere ‘conduits’ through which content passes”.
“Instead, they heavily monetise such content, without investing in that content or creating any of their own. Digital platforms must take responsibility for the way in which they use third party content by assuming direct liability for copyright infringement,” the CRA added.
“Digital platforms can no longer legitimately be considered mere ‘conduits’ through which content passes. Instead, they heavily monetise such content, without investing in that content or creating any of their own. Digital platforms must take responsibility for the way in which they use third party content by assuming direct liability for copyright infringement.”
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