Facebook slams ACCC recommendations as as ‘unprecedented’ in digital platforms response

Facebook executives have slammed the recommendations of ACCC’s digital platforms inquiry, calling the regulator’s proposals ‘unprecedented’ and warning they risk restricting Australians’ access to online services.

Facebook’s global associate general counsel for competition, Samantha Knox, told journalists at the launch of the service’s response to the ACCC’s preliminary report that the regulator’s proposals were ‘unprecedented’.

“The proposed level of regulatory intervention for the news regulator and ad regulator is unprecedented as far as I’ve seen,” Knox said.

“We have serious concerns about the impact the two proposed regulators will have on Australian consumers and businesses.”

In its response to the ACCC’s interim report, the social media giant also claimed the regulator’s recommendations will protect a few news publishers at the expense of Australian consumers and advertisers.

Facebook went on to criticise the ACCC for recommending third party advertising measurement tools, given the regulator admitted in the preliminary report that it hasn’t determined if the recommendations would solve the advertising industry’s measurement problems.

The response also criticised the ACCC for conflating Facebook with Google and misunderstanding how advertising is supplied and delivered on Facebook.

Facebook head of policy, Mia Garlick, said the ACCC’s proposals would not help the media’s monetisation problems

Notably, the preliminary report acknowledges that the ACCC has not determined whether such third party measurement and verification tools have solved the problem it identifies. It is, therefore, premature and unnecessary to appoint a special government ad regulator,” said Facebook in its response.

Facebook’s global associate general counsel for competition, Samantha Knox, told journalists the company agrees with Australian Competition and Media Authority’s view that the ACCC’s report has an outdated picture of the media and digital advertising industries, saying: “Facebook is not vertically integrated in the adtech stack.”

The response continued on that theme, saying: “The preliminary report’s recommendation for an ad regulator both conflates Facebook with Google and misunderstands how advertising is supplied and delivered on Facebook.

“The rationale for this recommendation is based on a claimed need to detect instances where ad ranking or ad displays on digital platforms may be ‘favouring their own business interests in the operation of advertising and ad tech services.’ However, Facebook is not vertically integrated in the ad tech stack, so it has no such businesses to favour. Facebook and Google are not the same entity and they should not be conflated.”

Facebook was particularly scathing of ACCC’s proposals to regulate online services’ algorithms, claiming any such move would protect incumbents.

“The preliminary report’s near-exclusive focus on protecting certain publishers from disruption and competition is at odds with the ACCC’s mandate to promote competition and protect consumers, and misapprehends the broader challenges facing journalism and news production.

“Those challenges are distinct from and long predate the arrival of Facebook, which has incentives to promote the interests of news publishers and journalism and has a strong track record of doing exactly that.”

“The preliminary report recommends that the government permanently insert itself into the operations of the largest digital platform companies apparently to ensure that a small group of large news publishers obtains certain levels of free referral traffic.

“Perhaps this recommendation is supported by certain news companies that hope regulatory intervention against Facebook and Google will insulate them from changing consumer preferences and new sources of competition for advertising revenue.

“It also puts the interests of a select group of publishers ahead of millions of Australian users and advertisers who derive enormous benefits from Facebook’s products and services.”

Mia Garlick, Facebook Australia’s director of public policy, also claimed the ACCC’s proposals would not help the media’s ongoing monetisation problems.

In the response, Facebook said: “Monetisation challenges for news and sustainable journalism long predate Facebook, with Australian newspaper circulation beginning to decline in the 1990s.

“These challenges stem from tectonic changes in technology and consumer behaviour. For example, the advent of 24-hour cable television news channels drew significant consumer attention and advertising business away from newspapers.

“The proliferation of the smart phone led to an even more rapid acceleration of choices for consumers in how to access news and information, including through online news services.

“Around the same time, classified ads unbundled from news content in print newspapers and shifted to specialised online services, compounding losses for newspaper companies. Today, Australians spend a significant amount of time on the internet and on mobile devices. In line with this, Australian advertisers have shifted more of their ad budgets online.”

Facebook also claims that rather than taking revenue from incumbents, the digital platforms have grown advertising ad spend.

“These changes have left print media with fewer readers and lower advertising revenue,” the report wrote.

“But it is a mistake to assume—as the preliminary report does—that the growth in digital advertising expenditure has come entirely at the expense of print media. In fact, digital platforms like Facebook have grown the market for advertising. Facebook helped propel that growth with an unprecedented level of investment and innovation for the benefit of users and advertisers.”

The ACCC is due to hand down its final report in early June.


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