Quality and competition are vital in the digital age

A strong media, as News Corp Australasia executive chairman Michael Miller writes today, is a cornerstone of democracy. At a time when news and information, incisive analysis, access to different perspectives and sagacious debate are vital, Australians’ interests are being let down by global digital platforms such as Google, Facebook and Apple. Consumers face significant incursions on privacy, as seen by Facebook’s Cambridge Analytica scandal, as platforms collect and harvest personal data for commercial purposes.

Digital platforms have little competition. In Australia, Google has 95 per cent of the search engine market and 50 per cent of the mobile device operating system market; Facebook has 80 per cent of the social media market; and Apple has about 40 per cent of the mobile device market. While publishers come from and are responsible to the communities they serve, digital platforms, in contrast, are far removed, unresponsive to criticism and unaccountable for errors that spread false, harmful content.

Against this background, Scott Morrison, in a world-first initiative, directed the Australian Competition & Consumer Commission in December to hold an inquiry into digital platforms, including their effect on the supply of news and journalistic content and competition in media and advertising services. Yesterday, the ACCC published 57 submissions from media organisations, consumers, journalists, advertisers and digital platforms.

News Corp Australia’s submission showed how the platforms’ market power has made them “unavoidable trading partners” for publishers, which are effectively trapped by the platforms’ anti-competitive practices. As media companies transition to digital, platforms are using their dominance to prevent publishers competing on merit.

The business model for the news industry is already in a fragile state, with the digital platforms preventing publishers from best positioning their operations for the future. As many as a quarter of all journalists in Australia have been made redundant since 2011. At the centre of the problem, as Mr Miller writes, digital platforms are subverting online subscription and advertising revenue streams, undermining the news industry’s sustainability as a private enterprise and necessitating widespread cost-cutting. For businesses wanting to advertise, the platforms’ control over the advertising supply chain is leading to less choice and higher prices, with advertisers too often finding their brands placed in unsafe online environments, such as alongside extremist or other unsavoury sites.

Platforms, as Mr Miller writes, “can decide what you see, when you see it, what you don’t see, what they know about you, the prices advertisers pay, where ads appear, and make or break businesses — with too little recourse for those affected. The potential to damage creation, distribution and consumption of news and cause widespread consumer harm is profound.”