Facebook and Google Algorithms Are Secret—but Australia Plans to Change That
Facebook and Google Algorithms Are
Secret—but Australia Plans to Change That
The government is considering limits to big tech’s
power over news and advertising markets, and boosts to privacy protections
By Rob
Taylor July 26, 2019 5:41 am ET
CANBERRA, Australia—Tech giants Facebook Inc.
and Alphabet Inc.’s Google
could have their secretive algorithms policed by a beefed-up watchdog, under
what Australia describes as world-first limits to the power that they wield
over news and advertising markets.
The recommended changes—which include strengthening
privacy safeguards with steep penalties of up to 10% of annual domestic
turnover for the misuse of data—are listed in a report by the national
competition regulator. It conducted a year-and-a-half investigation into the
impact such companies have had on the country.
It comes after Facebook was hit with a $5 billion fine in
the U.S. this week. A Federal Trade Commission investigation found the company
had repeatedly used deceptive disclosures and account settings to lure users
into sharing personal information, undermining their actual privacy
preferences.
The report by the Australian Competition and Consumer
Commission, released Friday, concluded U.S. tech giants wielded too much
influence over Australia’s news and advertising markets, stifling competition.
It also found many instances where companies had deprived consumers of control
over their personal information.
“Make no mistake, these companies are among the most
powerful and valuable in the world. They need to be held to account and their
activities need to be more transparent,” Treasurer Josh Frydenberg said. “The
world has never seen so much commercially sensitive data collected and
aggregated among two companies.”
Among the 23 recommendations is a call for the government
to set up an office in the commission to scrutinize the algorithms used by
Google and Facebook to rank news and advertising. The report said the office
would have the power to order Facebook, Google and other tech giants to hand
information over to regulators.
“This particular branch of the [commission] will be able
to be approached by various companies who believe that the algorithms have been
misused,” Mr. Frydenberg said. He promised the government would “lift the veil”
on how tech firms made money out of user data they collect.
Other recommendations include: a change to
merger-and-acquisition laws to prevent large tech companies siphoning up
smaller rivals; the removal of Google as the default search option on Android
devices; and, a harmonized regulatory framework covering digital markets—though
the commission stopped short of calls to break up Google and Facebook, or force
them to pay for news content.
Facebook didn’t immediately respond to the Australian
regulator’s report. A spokeswoman for Google said the company had worked
closely with the commission throughout its investigation and would “continue to
engage with the government on the recommendations.”
Digital-industry group DIGI—which represents Google,
Facebook, Twitter and Verizon Media—said lawmakers
need to think carefully about unintended consequences that could affect
competition and the range of products available to Australian consumers.
Mr. Frydenberg said the government would hold a
three-month consultation before deciding later this year how it will respond to
the recommendations.
Since the Australian regulator launched its investigation,
the U.K. Parliament released a report calling for tighter regulation of the
digital world, warning of a “democratic crisis” being created by the
spread of misinformation, while the U.S. FTC launched a task force in February
to monitor technology markets, including reviewing tech mergers.
“Make no mistake, these companies are among the most powerful
and valuable in the world. They need to be held to account and their activities
need to be more transparent.”
Media organizations including News Corp have called for more regulation of digital
platforms to help to stem a decline in advertising revenue and the loss of
subscriptions. News Corp owns Dow Jones & Co., publisher of The Wall Street
Journal.
Campbell Reid, News Corp Australia’s director of corporate
affairs, said Friday the commission had exposed the impact of tech giants on
Australia’s media landscape, with Facebook and its photo-sharing platform
Instagram accounting for about 46% of Australian advertising revenue.
“It’s clear the government is going to do something about
this,” Mr. Reid said. “I think Google and Facebook in particular should listen
very carefully.”
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