Tue, Dec 05, 2017 - Page 10 News List

Australia to probe online giants over media upset

Reuters, SYDNEY

Australia’s competition regulator yesterday said it would investigate whether US online giants Facebook Inc and Alphabet Inc’s Google have disrupted the news media market to the detriment of publishers and consumers.

Like their rivals globally, Australia’s traditional media companies have been squeezed by online rivals, as advertising dollars have followed eyeballs to digital distributors such as Google, Facebook and Netflix Inc.

The government ordered the probe as part of wider media reforms, amid growing concern for the future of journalism and the quality of news following years of declining profits and newsroom job cuts and the rise of fake news.

“We will examine whether platforms are exercising market power in commercial dealings to the detriment of consumers, media content creators and advertisers,” Australian Competition and Consumer Commission (ACCC) Chairman Rod Sims said in a statement.

The inquiry also would study how Facebook and Google operate to “fully understand their influence in Australia,” he added.

“We look forward to engaging with this process as relevant,” a Google spokesman said.

Facebook did not immediately respond to a request for comment.

The idea for an ACCC investigation was hatched during media reform negotiations in the Australian parliament earlier this year, which resulted in a relaxation of ownership laws to allow the nation’s big players to boost their market share to better compete against online disruptors.

It was unclear what measures the competition regulator could recommend to the government even if it found the nation’s media sector was increasingly anti-competitive, independent media analyst Peter Cox said.

“You could see this as a stepping stone toward another type of reform, such as tax,” said Cox.

Jurisdictions around the world, including the EU, are grappling with how to tax technology giants with global operations.

Corporate taxes are paid where firms have a physical presence, which allows digital multinationals to book most of their profits where they have set up headquarters as opposed to where they make their money.

The Australian probe will have the power to demand information from businesses and hold hearings. It is due to make its final report in 18 months.

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