Australia: Media and advertising markets. Smoke but no fire? Competition enforcement after the ACCC Digital Platforms Inquiry

The Digital Platforms Inquiry (DPI) arose from a Ministerial direction to the ACCC to investigate the state of competition in media and advertising markets. In both the Preliminary and Final Reports, the ACCC concluded that both Google and Facebook have substantial power in various markets – but was essentially silent about potential abuses of that market power.

The ACCC makes no concession that the reason it identified little or no specific anticompetitive conduct during its 18-month inquiry was that there were no problems to be found. Nor does it argue that Australia's market power laws are insufficient for the task. Rather, the ACCC's explanation appears to be that digital markets are so complex (and important) that more sustained and proactive investigation is required to uncover latent competition problems.

We discuss below the scope of the competition assessments in the ACCC's Final Report, the reasons for some of the gaps in the ACCC's analysis, and how the ACCC intends to fill them.

Market power findings

The Final Report concluded that Google has substantial market power in the supply of online search and online search advertising. Around 95% of online searches are performed through Google and Google earns almost 96% of Australia's online search advertising revenue.

It also found that Facebook has substantial market power in the supply of social media services and online display advertising. Facebook's audience is over three times larger than its closest competitor Snapchat's, and Facebook's and Instagram's combined share of online display advertising is around 51% (with no other player higher than 5%).

The ACCC backed away from its conclusion in the Preliminary Report that Google and Facebook had market power in 'news media referral' services – finding instead that they have substantial bargaining power with news media businesses, but declining to express a concluded view that digital referrals constitute a market.

Data accumulation

The ACCC specifically identified the accumulation of data by the digital platforms as key to their business models and as a significant barrier to entry and a source of their market power. The data held is valuable because of its scale, scope, quality and accuracy.

The popularity and the breadth of the platforms' services (e.g. Google across Search, Gmail, Maps, Android and YouTube and Facebook across Instagram, Messenger and WhatsApp) were said to enable them to build particularly valuable datasets and offer highly targeted advertising opportunities. The advertising revenue generated enables the platforms to invest in functionality and services, and so the breadth and depth of their ongoing data collection reinforces their market power.

Dynamic competition

The ACCC also found that the digital platforms were insulated from 'dynamic competition' (i.e. the threat of entry and disruption enabled by innovation), as same-side and cross-side network effects,1 strong brands, consumer inertia and 'default bias', switching costs, economies of scale and sunk costs act as barriers to entry and expansion.

The ACCC concluded that large-scale entry in competition with Google or Facebook is unlikely to occur at least in the short- to medium-term. Interestingly, the ACCC suggests that Google's market power is likely to be more durable than Facebook's, as same-side network effects may not preclude the entry of smaller social media rivals that appeal to specific user groups (such as Snapchat and LinkedIn). However, it's debateable how strong same-side network effects are in search, given it does not generally matter to users how many others use the same search engine.

Acquisition strategies

The ACCC also found that Facebook's and Google's strategic acquisitions have contributed to their market power and made several recommendations to seek to ensure its ability to scrutinise digital mergers.2

Advertising power

In the event of any eventual challenge to Google and Facebook's competitive conduct, the nature of competition and power on the advertising side of their platforms will likely be highly contentious. Irrespective of their market share and exposure to dynamic competition on the consumer-facing side of their platforms, there will be important issues to be determined about whether their competitive conduct is effectively constrained by advertising rivals.

Perhaps pre-positioning for that contention, the ACCC adopted some consistently narrow views about the nature of advertising competition. For instance, it found that:

  • none of TV, radio, outdoor and print advertising are a close substitute for online advertising;
  • within online, display advertising is not a close substitute for search advertising;
  • within search advertising, neither classified advertising nor 'vertical' search (e.g. Amazon or Expedia) are close substitutes for general search services provided by Google; and
  • within display advertising, Facebook faces little competitive constraint (in respect of its Facebook and Instagram ad inventory) either from other suppliers of non-social display advertising or from Snapchat, even in social.

'Potential' for market power misuses

Beyond analysing the existence of platform market power (which the ACCC acknowledges is not, itself, a concern), the ACCC's approach to analysing market conduct and competition concerns is substantially less developed. Given the focus and detail of the DPI, this apparent gap in the final report is anti-climactic.

Leveraging and preferencing

The ACCC identifies potential concerns about the platforms:

  • creating technical specifications to benefit their own products;
  • preferencing their own ad inventory;
  • ranking their own advertising services higher on search results or social media feeds, or excluding rivals;
  • favouring advertisers that use their advertising services in organic results or news feeds;
  • favouring websites that are a part of their advertising networks; or
  • preferencing their adtech services.

However, aside from a first-principles analysis, which ultimately amounts to an acknowledgement that vertically-integrated firms with substantial market power may have the ability and incentive to behave anti-competitively, no substantive analysis of potential anti-competitive conduct by the platforms is revealed in the Final Report.

Instead, the ACCC identifies 'incentives' to engage in anti-competitive conduct and the 'significant potential' for, and 'past evidence' of, infringements (and refers, in particular, to overseas enforcement matters).3

'In-market' misuses of market power

Additionally, the ACCC flagged the following concerns, which may also result in foreclosure or customer detriment:

  • foreclosing competitors' access to data;
  • preventing rivals from placing search ads on websites on the platforms' advertising networks;
  • restrictions on user behaviour (e.g. linking to rival social media sites); or
  • exclusionary behaviour (e.g. terminating competitor customers).

The ACCC identified two Australian matters. First, Dialogue commenced proceedings against Facebook in April 2019, alleging that Facebook breached Australia's misuse of market power laws by restricting Dialogue's access to Facebook and Instagram. Second, Unlockd commenced (but subsequently discontinued) proceedings against Google, alleging that Google terminated its access to Google's Play Store and advertising services because Google viewed it as a competitor.

ACCC responses

The ACCC notes that the terms of reference do not require it to focus on whether digital platforms have misused any market power. However, given it has identified a number of consumer law matters it is currently investigating, if the ACCC had uncovered specific competition concerns it seems reasonable to assume that it would have indicated that in the report.

Unlike in other areas of the Final Report, the ACCC does not suggest that the law needs to change to pursue potential competition concerns. The ACCC also considers that the existing tools of the competition law framework remain applicable for digital markets. In part, that is because the Australian prohibition on the misuse of market power was substantially broadened in November 2017.

Instead, the ACCC is focused on sharpening its investigative tools, addressing its own information gaps and generally seeking to build investigative capability in relation to digital markets. The ACCC identified that 'opacity and complexity' in digital, and particularly in online advertising, markets means that self-preferencing and leveraging might go undetected by regulators or market participants.

There are four parts to the ACCC's plans to bulk-up its digital enforcement capability.

  1. The creation of a specialist digital platforms branch to investigate competition issues relating to digital platforms.
  2. The ability to proactively investigate and gather information.
  3. The ability to periodically compel the production of data from digital platforms (the ACCC already has this power in telecommunications and energy markets).
  4. Publicly reporting on 'issues of concern' and making recommendations to Government and other agencies.

The ACCC's efforts will be focused on the larger digital platforms, which will need to brace themselves for years of sustained Australian regulatory complexity and cost, but there is clear potential for spill-over burdens to be imposed upon other market participants.

The ACCC has also made clear that the new digital platforms branch will work closely with overseas agencies, sharing information and aligning approaches to enforcement. This is likely to reinforce the feedback loop, and duplication, in global enforcement activity with which major global platforms are currently grappling.

Flirting with more radical solutions

The ACCC received ample encouragement to lead the world in pursing more radical reforms. While it is clear that little was 'off the table', the ACCC has generally reverted to a conventional regulate-and-supervise model.

Tackling perceived default biases

The ACCC identified branding and default bias in search markets as a barrier to entry that supports incumbents' market power. In response to similar concerns from European regulators, Google recently allowed users of Android devices to choose their default search engine and default internet browser from a number of options.4 The ACCC will recommend to the Government that it should consider compelling Google to offer this choice if Google does not introduce similar options for Australian users within six months.

Break-up and access to data

The ACCC considered and rejected two radical options.

First, the ACCC considered the potential for obligations imposed on platforms to share data or provide interoperability to lower barriers to entry and drive innovation in digital markets. While understatedly noting 'practical limitations' to such reforms, it declined to make any recommendations. It did, however, identify a specific intention to evaluate data portability further as it considers sectors to which the new Consumer Data Right regime will apply in future.

Second, echoing calls made overseas, some submissions advocated the break-up of the largest platforms. The ACCC did not engage with the enormous legal obstacles to implementing such a remedy and instead offered a principled response – to the effect that market forces are better determinants of market structures, divestitures would be unlikely to address network effects or branding/bias issues, and designing structural solutions would be very challenging given the data flows between businesses or parts of businesses.

While the lack of specific adverse findings on competition law issues is something of a surprise, the major digital platforms are a long way from being out of the woods in Australia. In addition to the various consumer law, data privacy and media reforms and regulation recommended elsewhere in the final report, they are facing at least 5-10 years of sustained regulatory scrutiny across their Australian operations.


1 Network effects describe the effect whereby the more users there are on a platform, the more valuable that platform tends to be for their users. Cross-side network effects are present when the number of users in one type of user group increases (or decreases) the value of the platform for users in another type of user group on the platform. Same-side network effects are present when the number of users in one type of user group increases (or decreases) the value of the platform for users in that same type of user group.

2 Those changes will be considered in detail in a forthcoming article on the implications of the DPI for M&A in the sector.

3 For example, the European Commission's 2017 finding that Google had abused its dominance in search services by giving an illegal advantage to Google Shopping (currently on appeal).

4 See and

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

Chambers Asia Pacific Awards 2016 Winner – Australia
Client Service Award
Employer of Choice for Gender Equality (WGEA)

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions