Australia is probing Google and Facebook for disrupting its traditional media
Following a sharp drop in advertising revenues, falling profits, newsroom job cuts and the rise of fake news, the Australian government says it will investigate whether social media giants, Facebook and Alphabet’s Inc., are ‘exercising market power in commercial dealings to the detriment of consumers, media content creators, and advertisers’.
Times are changing and unarguably, the social media is taking over the traditional method of advertising and spreading news and this has taken a great toll on the traditional media companies in Australia who are worried about their existence in the future. The Australian Competition and Consumer Commission (ACCC) inquiry has made an announcement about the probe is expected to commence today, to determine the effect that the social media has on the media and advertising markets.
With the increase in the fake news which spreads really fast on social media platforms like Facebook, Google and Netflix Inc., the government is worried-stiff that journalism may become extinct and high-quality contents may no longer have value. Following years of significant decline in profits, these rivals have successfully pushed the Australia’s traditional media companies off the spotlight.
The idea of an ACCC probe comes as a result of the media forum which took place earlier this year, after it was discovered that the social media giants had disrupted the traditional media companies, leaving them with little relevance. The idea, therefore, is to enhance their market share, so they can compete better against their online disruptors. The investigation entails a study of how Facebook and Google operate to fully understand the reason for such influence.
While Facebook is yet to give a response at the time of this report, a spokesman from Google confirmed the receipt of a probe-notice and responded, ‘We look forward to engaging with this process as relevant’.
Seeing that social media giants have a global influence, the European Union and other jurisdictions all over the world are confronted with the idea of taxing technology giants that operate globally. At the moment, these firms are only taxed based on the profits they make in their headquarters; whereas, they make good profits, globally.
Peter Cox, an independent media analyst believes that this phase is a stepping stone towards a new kind of reform especially in the area of ‘tax’.
The Australian probe is due to make its final reports after its investigations in eighteen months’ time, which is likely to be in 2019.