ACCC’s privacy rules could flick the switch on Google, Facebook

Privacy changes being mulled by the ACCC could seriously harm Google and Facebook’s business models in Australia.

ACCC Chair Rod Sims arrives to speak to the media about the release of the preliminary report of the Digital Platforms Inquiry into Google, Facebook and Australian media. Picture: AAP

Tech titans Facebook and Google are facing existential threats to their data-driven businesses in Australia. Changes being mulled by competition regulator the ACCC could mean data collection settings on services from the likes of Facebook and Google could be switched to “off” by default. That change would come alongside a number of proposed alterations to privacy laws.

The ACCC’s report recommended a raft of changes that could mean that, in Australia at least, Google and Facebook would lose their most valuable asset: intimate information about their users.

Facebook and Google’s services are free to end users, meaning the companies make much of their money from targeted advertising that’s related to the user’s personal profiles and interests.

“Many consumers would like to be able to opt-out of certain types of data practices and some digital platforms convey to consumers an impression of providing extensive privacy controls,” the ACCC says in its report.

“However, it may not be in the digital platforms’ interests to allow consumers to opt-out of such data practices and some digital platforms do not provide consumers with meaningful control over the collection, use and disclosure of user data by digital platforms,” it says.

At a press conference in Sydney on Monday, ACCC boss Rod Sims that the tech giants generally understate the extent of their collection of users’ data and overstate the control users have over their personal data use.

“It’s troubling,” Mr Sims said. “Without accurate information consumers are unable to make informed decisions.”

The report found that most digital platforms do not allow a user to opt out of all targeted advertising entirely.

Other proposed changes relating to data collection include that the tech giants allow consumers to demand erasure of their personal information, and that the government introduce laws to handle serious invasions of privacy, to increase the accountability of businesses for their data practices and give consumers greater control over their personal information.

The ACCC also revealed it was investigating five potential breaches of existing competition and consumer laws by “certain digital platforms” to determine if it needed to fine the companies or take them to court.

The watchdog also said Facebook and Google users had to often deal with lengthy and complex privacy contracts that included “take it or leave it” terms.

It recommended changes to the Privacy Act to strengthen consent, notification, and penalty regulations.

“The ACCC also notes that consumers will be better off if they can make informed and genuine choices as to how digital platforms collect and use their data, and proposes changes to the Privacy Act to enable consumers to make informed decisions,” the regulator said.

“The ACCC is further considering a recommendation for a specific code of practice for digital platforms’ data collection to better inform consumers and improve their bargaining power.”