Australia launches inquiry into how Google and Facebook affect local media

Australia's worried Facebook and Google could eat up ad dollars and hurt local media.

That's why the country's government formally ordered the Australian Consumer and Competition Commission (ACCC) to look into digital content platforms and their impact on media and advertising, with Facebook and Google at the top of the pile.

With print advertising expenditure in decline in the country, the government wants to get a better handle on the impact of digital content aggregation platforms, social media platforms, and search engines on the advertising market.

And we don't really blame the federal government for wanting a solid footing here. In Australia, Google boasts 95 percent of the search market, and Facebook's recent data shows there are currently 15 million active Australians on Facebook. That's around 60 percent of the country's population.

“As the media sector evolves, there are growing concerns that digital platforms are affecting traditional media’s ability to fund the development of content,” ACCC Chairman Rod Sims said in a statement, noting that the Commission would keep an "open mind" during the inquiry.

“We will examine whether platforms are exercising market power in commercial dealings to the detriment of consumers, media content creators and advertisers. We will also consider the impact of information asymmetry between digital platform providers and advertisers and consumers.”

The ACCC will wield Part VIIA of the Competition and Consumer Act (2010) to use compulsory information gathering powers. They'll produce a preliminary report early December 2018, with a final report due early June 2019.