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The Deep Dive

Prof. Caron Beaton-Wells counters Mark Ritson on ACCC's 'futile' attempts to crimp Google, Facebook; consumer 'privacy paradox' unpacked

By Paul McIntyre - Executive Editor

18 November 2019 5min read

By Paul McIntyre - Executive Editor

18 November 2019 5min read

Mark Ritson has called the ACCC's attempts to corner Google and Facebook as noble but "futile" and "laughable" - Big Tech is just too big for an Australian regulator to tame. But a leading competition law professor, Melbourne Law School's Caron Beaton-Wells, has other thoughts. She's says Ritson should "be patient".  She's concerned, though, that the ACCC's privacy proposals go further than Europe's General Data Protection Regulation (GDPR) and could stifle a data-driven innovation economy. 

"The privacy proposals by the ACCC are in fact stricter than GDPR. If we see the [consumer] data pipeline drying up, we're going to have difficulties in continuing to innovate based on data."

- Professor Caron Beaton-Wells, Melboure Law School, University of Melbourne

 

If you have anything to do with marketing, media or tech (why else would you be here?) then this 20-minute Mi3 Audio Edition is one of 2019's Mi3 essentials. Yes, we have an abridged text version below but with four weeks to go before the Federal Government responds to the ACCC's Digital Platforms Inquiry, this conversation with Professor Caron Beaton-Wells wraps everything up. And she elegantly tells Mark Ritson to try some patience. Many will love that. Listen here.     

 

You need to know this:
  • Caron Beaton-Wells is a Professor in competition law at Melbourne Law School, director of Melbourne University's Competition Law & Economics Network and a co-director of the Global Competition and Consumer Law Program.
  • Beaton-Wells says while the ACCC's Digital Platforms Inquiry is internationally "groundbreaking", she fears it could stifle a "data driven economy" and says "we need to ensure the consumer data pipeline stays open".
  • New Australian privacy compliance and consent regimes will likely see the big tech platforms better resourced and ready, after their GDPR experience, than local and smaller industry players and that a bigger burden will fall on smaller enterprises.
  • The "privacy paradox" is real - she says while many economists and industry at large point to consumer willingness to go online and hand over "oodles of their data at every moment" as a signal they don't care about privacy, they do but "don't feel they have a choice".
  • It's why regulators are catching up and stepping in to "future proof our capacity" to keep up with technological and industry developments and "hold these guys to account".
  • She expects the government's response to the ACCC to build in some "carve-outs or exemptions" in terms of how privacy reform is going to work  
  • Beaton-Wells says marketing and media industries must look "very closely at what's being proposed in privacy reform and data protection"; they need "their voices heard in Canberra" to ensure the pendulum doesn't swing too far on data protection.
  • But the "horse has bolted" for media companies. They will have to keep finding new ways to build customer bases and loyalty that are "not as advertising-based as they used to be".

"Privacy is a paradox because [consumers] do care, they just don't act that way ... because they don't feel they have a choice. They're resigned that they have to open up their personal world to get the products and services they want. Government is saying they should have a choice and that's where competition comes in."

- Prof. Caron Beaton-Wells

 

  • Mark Ritson wrote in The Australian that the idea that the ACCC will "hold these behemoths to account is, unfortunately, laughable. Australia is simply not big enough to have any impact on the corporate strategy of either Facebook or Google".
  • Beaton-Wells calls for patience. "I know the marketing professor might prefer to see short-term outcomes or immediate gratification, but you have to be careful with interfering with markets. The ACCC has said 'look we're on the case, just gives us the money, give us the time and we'll take the [legal] cases that will make a difference'."
  • On the competition side, the ACCC has said Google and Facebook have substantial market power and "that is a really important finding," says Beaton-Wells. "It's a precursor to taking legal action to enforce the competition laws against them when they abuse their market power". She says the ACCC wants to ramp up its ability to do that and develop skills through a specialist digital platforms branch to "build the data, proactively investigate and take proceedings".
  • The ACCC's investigations into consumer loyalty programs and its recent legal case against Google for misleading and deceptive conduct over its disclosure for turning off location tracking on Android devices is a case in point.    
  • Those cases "can take years" says Beaton-Wells. So in the meantime, the ACCC is aiming to fill a regulatory void.   

"Particularly around data, regulation is likely to have a practical impact. It is going to bite but it's not just going to bite the platforms, it's going to bite across the economy - any business using personal data is going to feel this."

- Prof. Caron Beaton-Wells

Want more?

Listen to the Mi3 Audio Edition here for Prof. Caron Beaton-Wells on:

  • Whether the Microsoft anti-trust case in the US two decades ago is a precedent for how Facebook and Google stifle industry-wide innovation and the regulators emerging positions.
  • If a "soft break-up" of the platforms on user "data portability" is coming.
  • The dangers of swinging too far in data regulation and privacy for industry.
  • What a "cascading monopoly" like Google means for regulation and other players in the  media-tech-marketing and data economy.
  • It's all here.

"A cascading monopoly, where a company has a finger in virtually every part of the pie around these digital markets and portals as a gatekeeper, is, from the EU's position, not good for innovation, it's not good for consumers in the long run. It has found abusive dominance in the way Google handles access to the Android operating system and AdSense technology. We're looking at $9bn so far in fines and mounting."

- Prof. Caron Beaton-Wells

Let's go. Click here to comment.

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