Tech giants targets of reform regardless of who wins federal elections

Technology giants including Google and Facebook will come under pressure regardless who wins next month’s federal poll.

ACCC chairman Rod Sims. The ACCC is due to deliver its final report on the ­Digital Platforms Inquiry on June 3. Picture: Hollie Adams

Technology giants including Google and Facebook are expected to come under pressure regardless of who wins next month’s federal poll.

While any clampdown will benefit traditional media companies, the next government will still have a full agenda on media ­reform, analysts said.

An inquiry by the competition watchdog into the tech giants is due in early June.

At the same time, a review of rushed legislation to curb live-streaming on social media sites will be among the first priorities of either a returned Coalition government or incoming Labor government.

“If the response to Christchurch is anything to go by, it is probably Google and Facebook that have the most to fear (from next month’s vote),” a senior media executive, who didn’t want to be identified, told The Australian.

Morningstar analyst Brian Han said: “Any policies to curb the power social and digital media would be positive for traditional media companies.’’

Technology and social media players are facing challenges on a number of fronts after the Morrison government this month rushed a bill to respond to community anger over the live-streaming on Facebook of the Christchurch massacre, and subsequent sharing of the video on other social media platforms.

Both sides of politics have promised to review the legislation — but through different committees — after the lack of consultation and potentially far reaching nature of the crackdown united media and technology companies in their opposition.

Media companies including News Corp, publisher of The Australian, are concerned that legislation includes them even if it was designed to respond to live streaming on social media sites.

The Australian Competition & Consumer Commission is due to deliver its final report on the ­Digital Platforms Inquiry on June 3, in a move that could provide a major boost to the traditional media companies.

In a preliminary report in ­December the ACCC unveiled 11 preliminary recommendations to crack down on Google and Facebook’s market dominance, including closer scrutiny of their activities by a government agency, new data collection rules and a ­review of “disparate” media laws.

Meanwhile Steve Allen, media analyst at Fusion Strategy, expects the ABC to be the winner and “probably no one else” if Labor is swept into power after six years of the Coalition in power.

The ABC board and an incoming chief executive would be watching to see if a freeze on ­indexation of its $1 billion annual budget comes into effect after Treasurer Josh Frydenberg this month confirmed plans unveiled in the 2018-19 budget to maintain the freeze on the indexation of the ABC budget.

This represents $83.7 million in funding over three years.

But Labor has vowed to reverse the indexation freeze and has also guaranteed funding stability over the next budget cycle. The move comes at a time when all commercial media players are seeing revenue under pressure.

ABC’s acting managing director David Anderson recently warned that “tough decisions” would need to be made on staffing and services because of the loss of indexation.

The ABC board, which is now chaired by Ita Buttrose, is also ­expected to wait until after the election to appoint a new managing director to replace Michelle Guthrie, who was sacked in September over her performance.

Fusion’s Mr Allen expects Nine Entertainment and News Corp to benefit from any moves to rein in the Facebook, Google, YouTube and Instagram, and other digital publishers.

Mr Allen said there were likely to be many more losers from a Labor win, including SBS, commercial free-to-air television broadcasters and newspaper publishers.

Mr Allen said SBS was a likely loser under a Shorten government, as Labor was “opposed to any alteration in commercialisation and advertising revenue increase”.

The huge rise in popularity in streaming services like Netflix, Stan, Foxtel Now and Amazon has made super-fast internet speeds and the National Broadband Network a major issue.

Labor has ruled out pumping more fibre into the project, with opposition communications spokeswoman Michelle Rowland last week warning “it is impossible to come up with a quick fix” as the rollout to eight million homes and businesses is set to be completed next year.