Australia to set up antitrust office to police Facebook, Google

SYDNEY (Reuters) – Australia said it would establish the world’s first dedicated office within an antitrust regulator to police Facebook Inc (FB.O) and Google (GOOGL.O), setting a precedent for global lawmakers grappling with the U.S. technology giants’ dominance.

FILE PHOTO: The Google logo is pictured at the entrance to the Google offices in London, Britain January 18, 2019. REUTERS/Hannah McKay/File Photo

The move outlined in a groundbreaking report tightens the regulatory screws on the technology behemoths, which have governments from the United States to Europe scrambling to address concerns ranging from anti-trust issues to alleged political bias to the spread of “fake news” and hate speech.

Just this month, Facebook disclosed it was facing an antitrust probe from the U.S. Federal Trade Commission. It also was fined $5 billion for failing to tell users how it was using their private information.

Australian Treasurer Josh Frydenberg said Canberra would form a special branch of the Australian Competition Consumer Commission (ACCC), the antitrust watchdog, to scrutinize how the companies used algorithms to match advertisements with viewers, giving them a stronghold on the main income generator of media operators.

“These companies are among the most powerful and valuable in the world,” Frydenberg told reporters in Sydney after the release of the much-anticipated report by the ACCC on future regulation of the dominant digital platforms.

“They need to be held to account and their activities need to be more transparent.”

The new ACCC branch would be designed to take inquiries from companies with exposure to the advertising market “who believe that the algorithms have been misused”, he added.

Setting up a new regulatory office was one of 23 recommendations in the report, which outlined sweeping proposals to overhaul the country’s laws and regulations to rein in the power of the U.S. tech giants.

Frydenberg said the government “accepts the ACCC’s overriding conclusion that there is a need for reform”. The proposals would be subject to a 12-week public consultation process before the government acts on the report, he added.

Google and Facebook have opposed tighter regulation while traditional media owners, including Rupert Murdoch’s News Corp (NWSA.O), have backed reform.

A Google representative said in an email that the company would “continue to engage with the government during the consultation process on the recommendations put forward in this report”.

A Facebook representative was not immediately available for comment. The company has said the ACCC underestimated the competition in the country’s advertising market.

The report will be closely watched by regulatory agencies around the world as governments scramble to adjust laws to accommodate the rapid growth of companies that hold huge sway over the advertising, retail, financial services and media industries.

Reporting by Byron Kaye and Tom Westbrook; Editing by Stephen Coates

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