Towards a Competition Enabling Framework in Asia Pacific: Opportunities & Challenges – Australia Chapter

Below, we have provided the full transcript of the panel discussion, Online Advertising, Market Competition, Data and Transparency: Opportunities & Challenges for the Ads Ecosystem in Australia, from the fourth chapter of our series, Towards a Competition Enabling Framework in Asia Pacific: Opportunities & Challenges.

George SIOLIS:

Okay, well, welcome to this session on online advertising, market competition, and data and transparency, opportunities and challenges for the ads ecosystem in Australia. My name’s George Siolis. I’m a partner with RBB Economics in Melbourne, and I’m very pleased to moderate the session today. This topic is the hottest of hot topics at the moment. And in Australia it feels like we’re at ground zero with the debate. The Digital Platforms Inquiry in 2019 was along with the Furman report in the UK and the Kramer report in Europe, some of the earliest forays into this area. ACCC has since launched a number of other investigations, including investigations into the EdTech sector. And it’s developed a mandatory code of conduct to address bargaining power imbalances between Australian news media businesses and digital platforms, specifically Google and Facebook. The ACCC is right at the forefront of the debate here.

And our job is to take you through some of the issues that have been raised by both here, but, but across the region and the world. The way we’ve constructed the session is to take you through three topics. First we’ll start at a fairly high level and talk about some of the general concerns around competition with digital platforms. These platforms have really changed the way we live, the way we work, the way we shop and the way we play, but they’ve also led to a few concerns. And that’s, what’s been the focus at the moment. Second we’ll look at the role that data’s playing in that debate. Data has become the price of accessing some of these services. And it’s been used to tailor ads to people, which is a good thing, but also presenting some privacy and other concerns. And it’s entrenching barriers to entry so there’s some really interesting issues about the role that the data’s playing here, both in terms of benefiting people and potentially creating barriers to entry for some firms.

And finally, we’ll look at the impact all that has on online advertising and look at policy responses such as the news media bargaining code developed by the ACCC. So that’s the plan. I’ll now introduce the panel, I’ve put a very good panel for you today.

Firstly Aurelien Portuese is the new director of antitrust and innovation policy at the Information Technology and Innovation Foundation. Aurelien is also a professor at the Brussels school of governance of the Vrije University, Brussels, is an expert on EU antitrust, law and economics. And he’s currently working on a book entitled Antitrust Populism to be published by Oxford university press. Chris Berg is a senior research fellow and co-director of the RMIT Blockchain Innovation Hub. The world’s first dedicated social science research center studying blockchain technology based at RMIT University of Melbourne, is the author of 11 books, including most recently, The New Technologies of Freedom.

Peter Leonard is a data business consultant and lawyer advising businesses and government agencies, He’s the principle of Data Synergies and a professor of practice at UNSW Business School, Peter chairs the Internet of Things, Alliance’s Australia data work stream, the law society of New South Wales privacy and data committee of the Australian computer society’s artificial intelligence and ethics technical committee. Peter was the founding partner of Gilbert and Tobin. And since his retirement, he continues to assist Gilbert and Tobin as a part-time consultant.

John Yun is an economist and associate professor at the Antonin Scalia Law School, George Mason university, and the director of economic education at the Global Antitrust Institute. Prior to joining Scalia Law, he was an acting deputy assistant director in the Bureau of economics at the USFTC. He’s also taught economics at Georgetown university, Emory university, and Georgia Tech. So that’s a great panel. We’ll start with general concerns about competition in digital markets. John why don’t you start here?. There’s been a lot of potential on digital platforms recently. What are some of the concerns with those and are the existing tools that we’ve got good enough to handle those? Or do we need to think about new ways of lifting some of those concerns?

John YUN:

Thank you, George, and I’m just really excited to be on this panel and to listen to everyone’s comments because it’s really a terrific group that has been assembled. So yeah, there is a general concern about market power in digital platforms. And market power in itself can be a problem. Now, does that mean it’s an antitrust problem? And that’s the perspective I usually come from and that’s a separate question, right? Because market power in itself isn’t an antitrust violation at least in most jurisdictions. And so, is it specific conduct that we’re worried about? And at times I think that’s true. Are we worried about privacy? Yes, certainly those are areas as well. So, since this is really going to head towards advertising, I thought I would just tailor my remarks, which will be brief on advertising and specifically how we should view platforms, market power over advertisers.

And for me, I think the best place to start is to look at the business organization of these platforms, right? I don’t think it’s any surprise to anyone who analyzes these markets, that these are multi-sided platforms and whether you’re talking about Google or Facebook or, Instagram or YouTube, or really any other type of platform that has ads, they’re trying to attract various types of groups, usually users, viewers, listeners, whatever it may be, to engage in the content on that platform and then attract advertisers to that. And so why do I mention that? Because to understand really the market power over advertisers is really to understand the market power over the users.

And so I think investigations or considerations of market power really should start with users. And so to the extent that users are prohibited or constrained or have limited choice or inability to switch or move their information or data, I think that raises concerns because advertisers want to follow users and it’s not the other way around. But if we start from advertisers and look more on their hindrances and some of the switching costs they have or multihoming costs, then I think we can actually move in the wrong direction because advertisers will go where users go.

That being said, I think artificial hindrances to, to advertisers can be a problem. So just to give you an example, I was looking at very obscure magazines in the U.S. There are magazines, Private Island magazine, Fashion Doll Quarterly, Spudman magazine which is on potato farmers. And the reason I mentioned that is because why do these low stake or low volume magazines exist? And often are very profitable is because, well, they have a certain set of users, right? And the reason I highlight that is I think it’s exactly the same online. And so the point being is that to look at market power that they have over advertisers is really to focus more on the users and rather than on the behavior of advertisers per se. Trust me, they will go where the users are and where they can monetize in terms of their platform.

SIOLIS:

Okay, thanks John. Peter, do you want to chip in on that?

Peter LEONARD:

Yeah. I mean, I think it’s, in Australia it’s a very interesting regulatory issue, partly because of the audit regulatory structure in Australia where the ACCC is a vertically or horizontally integrated regulator policy maker and policy implementer. And that has meant that we have sometimes I think got confused in Australia between the role of the ACCC in competition regulation, and its role in consumer protection regulation. And that has become even more confused as we’ve talked about privacy law reform and the ACCC has, into the debate as to what data privacy laws should look like in the future and from the viewpoint of consumer protection and protection against misuse of market power. So we now have a very interesting situation where the ACCC is funded on a rolling ongoing basis from 2021 to 2025 to review activity in the digital services and digital platform sector.

And we’ll be putting out reports every six months. So it’s kind of like regulatory rolling thunder from the ACCC. And it appears to be intending to systematically work through different aspects of digital markets. It put out a report on online messaging services a couple of months ago, there’s one due out on digital app platforms early next year and so on. So I think it’s a very interesting example of Australia’s regulatory approach, where you as it were, crank up the pressure on commercial participants in the market, by providing them information about the operation of the markets and making it clear that if the regulator doesn’t like the way that the markets are operating, the regulator may recommend regulatory intervention. So I think it’s interesting because in other countries, the development of regulation has been much more episodic. Whereas in Australia, this rolling approach to regulation of the market really puts the pressure on participants in the market to come up with commercial solutions or face regulatory intervention. And of course the news bargaining code is just one particular example of using regulation in that way.

SIOLIS:

Thanks Peter. Chris?

Chris BERG:

Sorry. I was muted my apologies. Thank you for having me. And it’s great to join such a wonderful international panel so that we can bang on about Australian regulatory policy and politics of course, because so much of it is driven by politics. As we’ve seen with the news media bargaining code. To address the, just this first topic about, is there a competition problem in digital markets in Australia or in the region? I really liked the way John framed it, which is the question is about users.

Users are the multi-sided market platform. The first thing that we have to think about when we think about digital market competition, as opposed to the competition in industrial markets, which we’ve been more used to regulating throughout the 20th century is that multi-sided market platforms. These platform organizations, they have different economic characteristics to the sort of factory industrial model that we are more familiar with. And that that competition policy was actually designed to deal with. And competition policy and antitrust policy is usually trying to peg consumer harm. So high prices for example, to consumers, is the indicator of damage or harm in competition policy in competition that you might be able to use competition policy to ameliorate. In digital markets, because these platforms are a unique form of economic organization. It looks very strange.

If you’re trying to identify the harm of a user of concentration in social media markets, let’s say concentration in Facebook or something like that. Well, it’s very hard. It’s very hard to identify what that harm is because it’s a zero price, at least for the consumer perspective. So we can’t see monopoly pricing. So the ACCC and other regulators around the world have been searching for the harm in these digital markets, because it has observed that there seems to be a concentration of some description. At least if you define the market in a particular way, if you say it’s social media with your friends and family, well, that’s Facebook. And so the harm must be in data, and the harm must be to privacy. Now I do think that there are some serious issues regarding privacy in a lot of these digital markets.

And there are some serious issues regarding data. And the way we manage data is I think we’re in the midst of a evolving social negotiation about how we manage data and how we manage privacy on these fundamentally new breakthrough technologies. But my observation, at least of the competition debate in Australia at the moment is that we have identified the existence of large organizations. And we are trying to figure out how they might be harming us. We are going this entirely the wrong direction. We are not identifying the harm first, we are identifying the, we are observing that there are big companies, so therefore they must be harming. And we’re trying to squeeze that into a regulatory framework that has not been designed for these organizations. So that’s the first point I want to make.

The second point I want to make, at least from the Australian perspective is really critical and really important. Australia is a small country. Australia is a small country that is highly integrated with global economy. And the companies that we are talking about here, Facebook, Google, they are not Australian companies. We have had a real challenge trying to map our competition regulation. And in fact, most of our regulations surrounding internet and other telecommunications to the fact that these are not Australian companies that are, and they are much harder to regulate in, by Australian regulators than say a traditional competition problem in Australia.

Australia has relatively concentrated markets across the economy. There’s a lot of arguments made that we’re excessively concentrated in the banking sector, in groceries and supermarkets, even in some of our key industries like minerals and so forth, at least to the extent those claims are correct, they are the thing that the ACCC can deal with. But if Facebook is buying Instagram, yes, the ACCC might be concerned. Australian regulators might be concerned, but it’s very unclear what on earth they could do about it, even if they found that was really specific harm. Now, I’m not saying that’s a good thing from an Australian perspective, but I think it’s something that the debate here has to come to terms with.There is a lot of these, a lot of these markets are operating outside Australia and we are just regional offices at best.

SIOLIS:

Okay. Thanks, Chris. I’ll just pick up on a couple of those points because I think they take us nicely for the sort of second theme, which is about data. You mentioned a lot of these free services, but people essentially pay for the service through their time and attention. So data is the price they pay. So typically we think about substantial market power a competition concern as firms being able to set prices above competitive levels. Now, obviously, these are free to the users to consumers, but it’s the equivalent, it’s the equivalent concern here that some of these data platforms are able to extract more data than they otherwise would’ve in a more competitive market, whatever that means. So is that I guess, a reframing of the competition concern that’s separate to privacy and more to do with just standard vanilla sort of competition concerns.

BERG:

Well, look, I have some sympathy to that argument. I’m not sure that we could say that attention itself is a cost. Attention is consumption. But having said that if it was the case that the parliament wanted to reframe Australia’s competition law, so that it treated the sharing of information as a type of payment, now that’s a debate that we can have. I think that’s going to be a hell of a complicated debate, and it’s going to very easily fall into a philosophical morass, but that’s not the legislation and that’s not the competition policy that we have. And it’s not the competition policy that has been presented to us for the last century or at least in Australia since the 1970s.

I think one of the challenges that we have here, one of the challenges that we have here is that we are facing fundamentally new technologies that are creating fundamentally new markets in a category of economic organization, that until quite recently was an interesting quirky subtype. Now it absolutely dominates digital platforms, dominate the economy. We do not have even the economic framework to understand let alone the antitrust policy that we’d be able to interpret these changes.

SIOLIS:

Okay. The second, the second frame, that’s what I need to start over. And I’ll come on to the others as well is, and you just touched on it then that the digital platforms are dominating and it’s the role that data’s playing in entrenching that market power. So we’ve had free multi-sided platforms before radio freed away, TV, newspapers. So there’s nothing really new issues in the way we deal with some of those things. But the difference here is that there’s a concern that market power being created by digital platforms is not only being entrenched, but is self-fulfilling almost, it’s growing. Is that a concern? Is data playing a role in infringing and trenching that market power? I’ll throw that open to anyone.

LEONARD:

I mean, I think to pick up on Chris’s comment, data is significant in creating power imbalances. And what has, I think really happened in relation to media platforms, media publishers, and the digital platforms is that the movement of data about users from the media publishers to the digital platforms has created a power imbalance, which requires regulatory intervention. Now, I agree with Chris that it is difficult to then feed what is happening into conventional analysis of competition role and whether that’s because the market’s are two sided or the data about users is not directly attributable to the news that they consume is a problem in trying to relate this to conventional competition theory. But I think what is relatively uncontested is that the media publishers do not have sufficient marketing, sufficient ability to negotiate a deal in respect of the attention that is captured by the digital platforms through the access to news. And it’s that break between the place where the value is generated and the place where the information about the attention that is gathered through the use of that value. That really is the issue that competition law is struggling to address.

SIOLIS:

Yeah, I agree. We’ll touch on that more within the third theme. But John, do you want to chip in on any data concerns?

YUN:

So, certainly data is at the center of the debate and with good reason, right? Because these platforms generate an immense amount of data, and it doesn’t matter if you’re a small, medium, or one of these big tech, large platforms, but the question is what do they do with it? Right. They gather it. Almost all of them collected and gather it, and then they transform it into something. And so what is it that they transform it into? Well, focusing on one side of the ledger, the users let’s say on a Facebook or a Google, the data is used in some ways to help them. I’m not saying all of it all the time, but they’re using it to curate the content, to improve the search results, to iterate it, to really generate new sort of insights into analytics, things that will improve the overall functionality of the platform.

Same thing from the advertisers’ side, right? Because advertisers with better data, they’re able to target the users at a time particularly when they’re most receptive to perhaps the advertising messaging. And so from all these perspectives, you can imagine, as George mentioned earlier, that these are beneficial things that can certainly happen with data. And so, taking a step back before we go into maybe some of the not so beneficial aspects of data, I think it is important to recognize that this step isn’t automatic. I think there is a tendency, at least in antitrust. I’m not saying this extends beyond the computer science or other data areas, but within antitrust, there’s a tendency to view the collection of big data as automatic in terms of providing barriers to entry, providing some type of insurmountable advantage, and it can provide an advantage. I’m not saying they don’t, but it takes a moment to say, “Look, we go from collection of data, to the unlocking of value from data,” and there’s what we would, in economics, call cost step, right? There’s some degree of opportunity cost to do so. Just to give you an example, I have a lot of data sitting on my desk, not literally, but on my computer, and I need to do something with that. I need to write some research papers and transform that into something that hopefully others find of value, but it doesn’t happen automatically. Clearly having good data or better data is more beneficial to that output, but it’s not the only condition that is required. It takes effort, it takes skill, it takes insight, and so companies that are able to take advantage of that are going to get in the lead. What we would attribute to just having more data might be sort of mistaken, in that a lot of this has to do with just better insights from that data.

Another thing that comes up is sort of this imbalance of data, right? There’s this view that big tech gets more data, and yes, maybe it’s beneficial, but it just feeds on itself. They just keep getting more data and it just becomes this insurmountable barrier that no one can compete with. Well, one, it’s premised on these products getting better, so that’s something we do have to consider, but more importantly, how does this relate to other inputs that we see in the economy? This is where I think looking at other industries in terms of their research and development, there’s patents, there’s clearly the size of facilities and infrastructures.

We see competitive imbalances in a lot of places, and again, this doesn’t mean that they lack market power. They might very well have that, but then, I think Chris was mentioning this, does that translate into actually specific conduct that’s anticompetitive? I think that’s what we need to apply to data as well. I think we just need to be careful that just the mere possession of it means that they can engage in some monkey business and some shenanigans that are in violation. They might, again, but I think we need to get very specific, and just to close it out. Clearly there are privacy concerns with data, and I think this is where I’m the most vigorous in terms of my scrutiny, in that they have set privacy policies that they represent both to users and advertisers in terms of how they’re going to use the data, what they collect, and how they’re going to benefit the users and advertisers from that data.

I think deviations from that, and the FTC has certainly found them, really need to come down hard. I think they need to have even almost punitive damages, because there’s some probability that they won’t be caught. Optimally, these sort of penalties should be almost higher than the actual harm that they caused to create a disincentive to deviate from those policies. I think just to summarize, I think clearly there are beneficial aspects. There’s misuse of data, and I think we should come down really hard on the misuse.

SIOLIS:

Okay. Just go back a bit. What do you mean by misuse of data, specifically? What sort of things are you concerned about? Is it that within sort of old economy, if you like, if I see something I like, and I want to buy it, I can see what the price of that is. I might be able to negotiate that price, but I know what I’m up for, and I can pay that if I’m sort of willing to pay for the item, but with data, I don’t know how much it’s costing me in terms of what data they’re collecting, and how they’re going to use that data. In fact, how others might then use the data. Is that the misuse you’re talking about? Or is it something else?

YUN:

That’s precisely it, George, in that you know, as you said, in a lot of industries, traditionally, we know precisely how our data is being used. We reveal it. It’s often right there at the table. With digital platforms, we just don’t know what they’re doing with it, and this consequently raises sort of benefits if you will, in some sense. But this is where the consumer protection concern is the highest in that I think it’s okay for them to use it in ways that maybe we think is a violation of privacy. Privacy to me is control rather than data per se, right? We’re going to share our medical data with our doctors, but we wouldn’t share it with our colleagues, because it’s how we use the data, we want that control over the data.

As long as platforms are very open about, “Look, we don’t track you outside of our sites. We don’t add cookies, or, to advertisers, we won’t share your data with others, or we won’t use it to compete with you.” These types of things, I think, are really important, and I don’t mind them having very aggressive use of data. It’s just how they represent it, and then if they deviate from that. That’s where I mean misuses. Deviations from their stated policy, not some objective sense of how data should be used.

SIOLIS:

Yep. Peter, do you agree with that. I mean, do you think there are issues with how data’s being used, and our sort of institutions capable of dealing with these sorts of concerns?

LEONARD:

Yeah. Look, I don’t fully agree with John, in that data involves an aspect of our lives that goes beyond the consideration of whether we are a consumer or not. It’s an inevitable exhaust of our everyday life. If you choose to use Facebook, then you contribute data regardless of whether you wish to contribute data or not. It’s not only a question of transparency and whether the platform complies with what they say they will do. There is the inevitability of the extraction of data as a result of the conduct of your online life.

Now, I think there’s another aspect of that though, that I do strongly agree with John, and that is that it’s not all about data. Indeed, it’s mostly about analytics, not about data. Part of the problem in this debate is that when we talk about the relative contributions of, for example, news platforms, media platforms, and the digital platforms, Facebook and Google Search, the value that the digital platforms create through analytics is undervalued.

To be frank, we find ourselves in the situation that we’re in, because some of the news publishers, media publishers, underinvested in the analytics as to their users for a long time. So I do think that it’s a more complex debate than who has the most data and who controls the data. We have to always be very aware that that analytics and investment in analytics is a very important influencer in where the value is allocated. That is often understated by the critics of the digital platforms who really don’t take account of their investment in analytics at all.

SIOLIS:

Yeah. I agree with that, Peter. I think it’s a good point. I mean, to what extent… And this comes back to sort of my point about, are we concerned about market power being entrenched here? I mean, the more data you have, I think, the better your ability to analyze that data is. Your ability to get insights and curate that data improves with the more information you have, so does that then provide sort of advantages to the bigger players, because they’re just able to collect more, and do more, and analyze more? It makes it even harder for rivals to come in. Is that part of the sort of loop that we’re concerned about?

LEONARD:

Well, yes. Yes it is, but the other aspect of that loop is that so long as we continue in a notice and consent based privacy world, and we continue to crack down on third party cookies, what in essence we are doing is advantaging large vertically and horizontally integrated platforms who can be a one-stop shop for the giving of notices and the obtaining of so-called consents, so that scale is an advantage particularly where we’re starting to become much more forensic in how data is being used in advertising data ecosystems. There’s a real danger that, in particular in Europe and the way it’s dealing with cookies, what we in essence will do is disable the use of third party cookies, which actually enables some distribution of economic value in advertising data ecosystems, and concentrate further the power of the vertically and horizontally integrated parties who don’t want to share cookies or cookie data with third parties. I do think there’s quite a close interrelationship here between data privacy law, cookie regulation, and advertising services in the advertising services sector, and competition law. That makes this a particularly difficult issue to solve in regulatory terms.

SIOLIS:

Yeah.

BERG:

Can I just jump in there, George?

SIOLIS:

Yeah.

BERG:

I think the data issue is important, but it is a little bit of a red herring, I think, from a competition analysis perspective. You can make the claim that we have excessively concentrated industries without even needing to analyze, well, how do they use data? Because these are platforms, they have increasing returns for each additional user, and it’s not because they’re just collecting data. It’s just, we want to be on the same social media platform that our friends are and everybody else is. They already have this inbuilt, because they are these platforms, they have this inbuilt tendency to grow and to benefit from that growth.

The reason I raise this is, because I do worry that there’s a little bit of, I think John sort of alluded to this, there’s a bit of magical thinking about data. That these organizations, these firms seem like black boxes to which we share everything in the world, and then somehow they manage to monetize that, somehow they manage to onsell that.

I don’t think that’s a great way. I don’t think that helped us with our that lack of precision about how the data gets used, and our tendency to almost conspiracize about how they might use it. The way I think about data though, is the data on these platforms is not just data that we share. It’s data that is co-created by us and the platforms together. That creates really complicated ownership questions. Do I own the social graph I have on Facebook or does Facebook own it, or did we co-create it together? It’s a very complicated thing from a privacy perspective as well.

The other thing is, and agree with John framing it as privacy as control, but when you frame it as privacy as control, you have to remember we all have very different perspectives on what level of control we want. Privacy is a deeply subjective concept. In fact, it’s so subjective that we all have different definitions of it just as consumers in the market. I worry that a lot of our competition conversations and particularly the ACCC’s conversation has built up an ideal model of what they think we should want from privacy from our social media platforms or what have you, and then created that failure to live up to that ideal that they imagine to be a market failure of some description.

I think these are just very complicated issues and, and I don’t propose to have a solution to them, but I’m very uncomfortable with the direction that we’re going using the existing regulatory and political frameworks we have.

SIOLIS:

Okay. All right. Well, let’s move on to our third theme, which is the mandatory code of conduct that was developed by the ACCC to address bargaining power imbalances between Australian news media businesses, and Google and Facebook. That’s seems to be moving ahead. It’s not new in a sense that we’ve had codes before to address various issues in Australia, but this is a little bit different, because it’s a code with teeth. It’s a code with really sharp teeth, I think, because it involves some fairly prescriptive rules about how the negotiation will actually take place.

This is a code like no other here, so I guess the question is, and John, you… Sorry, Peter, you started talking about the imbalance between news publishers and digital platforms. I just want to discuss a little bit whether something like this is necessary and who it will help. Maybe we’ll start with Aurelien this time. Sorry. You’re still on mute.

Aurelien PORTUESE:

Thanks, George for having me. It’s a real pleasure to be part of this panel, and the conversation I heard is very interesting. If you want to know more about data, what could become data regulation in Australia, you may look at what’s going on in Europe with GDPR, and you may see the limits of data regulation in GDPR and the proposals that we have.

As for the news major bargaining code that is proposed to Australia, I think it’s a major reform as Australian Treasurer Frydenberg has said. “It’s a huge reform,” I quote. Well, we don’t know if it’s going to be a very positive reform. It might be a huge mistake. I’m going to make a couple of remarks, I mean, worries that one can have about those reforms.

The first remark that we can have from the code is that when we listened to the treasurer, he said that I quote, “This code will enable commercial negotiations to be conducted in good faith. According to the good faith principle.” Already that’s very strange, because the good faith principle is completely alien to Australian legal system. A good faith principle doesn’t exist in Australian legal system. It’s a principle that exists from Article 7 of the Vienna Convention of the Sales of Goods. That has been applied in Australia, but Australia legal system is very much like a common law legal system.

The good faith principle is precisely the main reason why the UK is not adherent to the convention of the sales of goods: because the good faith principle is too vague, too imprecise, and common law systems prefer the criterion of reasonableness, because it’s much more precise. Why? Because to expect news publishers to conduct commercial negotiations with Google and Facebook, according to good faith principles may mean everything and nothing.. If good faith means no lies, no misrepresentations, no fraud, no malice. Well then, Australian contract law principles are already here, right?

Misrepresentation is illegal and fraud is illegal, so you may have already law of contracts which are already applicable. Of course, good faith principle, according to that code, would go much further, much more in depth. Let’s suppose that good faith principle may mean using bargaining power in order to extract some surplus from gains from trade. Well then, that will be completely legitimate corporate behavior, but then, that might no longer be legal. Just to use the bargaining power in order to extract some gains from trade will automatically become suspicious, because it’s not according to the good faith principle that the other contracting party didn’t have a greater share from the contract.

What I’m saying is that those contracts, which are valid according to Australian law, may end up being become illegal because the other party has not gained sufficiently from that contract. This is very discretionary, because we just don’t know how much the other party may have to win in order for the contract outcome to be considered compliant with a good faith principle. So this would create a lot of legal uncertainty because contracts that are signed and negotiated legally and legitimately may end up being considered as unfair and not compliant with a good faith principle.

This will just create greater legal uncertainty. This will, of course, because of this increased legal risks, this will add transaction costs for news publishers, but also for these big digital platforms. That will, of course, deter innovation. That will deter innovation, because you always under the threat of having your contract (while your lawyers have said, it’s completely fine, it’s signed according to the law) under the threat that subsequently the regulator comes and say that although it’s legal, according to Australian contract law, it might not be compliant with a good faith principle because the other party didn’t get a great share enough. That’s very detrimental for Australian regulatory framework and the legal certainty, or at least innovation incentives.

The second remark I’m wanting to make is the discretionary take that is taken in this code. We only talking about Google and Facebook. Why do they select Google and Facebook? We just don’t know. If you look at the digital platform inquiry, precisely I quote, “The digital platforms were referred in 2018,” which was not long time ago, “as Google, Facebook, Instagram, Twitter, Snapchat, and Apple News,”, so why are we no longer talking about Google, Facebook, Instagram, Twitter, Snapchat, and Apple News? At least, and there are many others, but at least even if we want to be coherent with the 2018 reports, well, it looks like we’ve dropped a couple of names and for no reasons, right?

Why aren’t we as harsh with, let’s say Apple News, or Twitter, or LinkedIn, or whatever digital platforms you want to call. There are many other digital platforms. This code, I mean, that’s what the treasurer has said, is arbitrarily selecting these two platforms, because he want to create a duopoly where in effect, there’s real competition between those platforms, and he just want to create this false impression of a duopoly, and of course, there’s no duopoly in the market. I mean, I assume there’s no duopoly in Australia and in any other country.

The third remark I wanted to make is that this code, if you want to take just broadly, this code is just an alternative to proceedings, right? You could sue companies, or you just regulate ex ante, and these proceedings have precisely taken place in a number of European countries, and most recently and most dramatically in France. Just a couple of weeks ago, we have the Paris Appeal Court that confirmed a decision where the French Competition Authority sanctioned Google News for willing to remove the news snippets, (titles of the articles, and the pictures). The decision prohibited this removal and forced Google to negotiate with news publishers.

Because of course Google News didn’t want to pay for those snippets and said, “We’re going to do exactly what we’ve done in Spain, where we removed everything,” so they said, “We’re not willing to pay for those. Instead we’re going to just leave the French market,”. But not only you have to pay, but if you don’t want to pay and you just want to leave the market because you don’t want supply and just leave the market, then you’re forced to contract with news publishers.

Of course, this is a very gross restriction on the freedom of contract because you force companies to contract. This is implicitly treating those companies as essential facilities without evidencing the need for treating these companies as essential facilities,. So this snippet tax where you have to pay whatever. So you’re forced to advertise, and you’re forced to pay those news publishers, this is a tax. Something where you’re forced to do something, and you’re taxed while doing that thing. This is just a tax. So the question is, why do we have this tax? If this tax is about media diversity, then every company having market power or not market power should be subject to that tax. Let’s assume that taxes are fair. And then if it’s a tax, then all these news publishers should receive that tax from any news aggregator being, again, Facebook, Google, or whatever company it is.

If it’s about media diversity, but if it’s not about media diversity, and it’s just targeting a small set of companies because of abuses of dominant positions, that’s competition law. And therefore, if it’s just competition law, then current Australian Competition Law would be sufficient. So we just don’t see the point of what is this tax is leading to, and it will lead to a tax, because if you take the French experience of proceedings, it will lead to having those companies at the end of the day, being forced to pay these new taxes. And it’s just not clear what’s the objective.

The fourth remark I want to make is that, of course, this code is an alternative to proceedings. So you either sue the company, or you regulate the ex ante, and that’s precisely what Australia appears to have chosen to regulate ex ante. This is what exactly on the 15th of December, the European Commission is going to announce these ex ante new competition tools,  Here we assume that antitrust enforcement is not working, is not working sufficiently quick enough and strong enough so that we have to regulate ex ante. With all these ex ante rules. It’s just happen because we fail to demonstrate the abuse of dominant position exposed. And it only takes a very precautionary approach to all these issues. Before these conducts arise, then we want to regulate them even before they arise. And so we just completed the effect based approach, we just ignore the very fact of balancing the pro-competitive effect with an anti-competitive effect. And we want to regulate from a precautionary approach. Just regulate before things happen. similar calls in Europe, also in Us, if you look at the house reports of a precautionary approach. And it’s of course, if you embrace the precautionary approach, it means that to some extent, you just depart from innovation based antitrust because the precautionary approach is opposite to innovation concerns.

And so the final point I want to make is that, well, we may have for this code, Austrialia may have Google and Facebook no longer freeriding, but, what if these companies are bringing traffic to the news publishers? What if there is no freeriding, and also it might be that the news publisher maybe somehow freeride, since they have a way of attracting consumers through the snippets of Google and Facebook, and then they attract these consumers, these users to their websites. This is exactly what happened in Germany, where precisely some news publishers like Springer, just given up the right of having Google being paying for these snippets because they realized that the previous deal was better than the new deal.

The deal where snippet we’re not page is better than having Google not willing to pay and therefore removing the snippets. So what I’m saying is that the problem is very reciprocal, in a sense that it’s not only, of course, this company, kind of freeriding but it might be on the other way round so that some news publishers get traffic only because of these snippets.

So just to conclude on these few remarks, I found out that Australia is lucky enough to have ACCC chaired by Rod Smit, he delivers speeches and write articles. So he wrote an article this year, I think it was in May of 2020. He wrote an article on the antitrust Bulletin, where he precisely criticized the hipster antitrust movement, and quote, “Counterproductive to introduce a broader public interest consideration into the enforcement of competition laws in Australia. And most importantly, in this article, the chair of the ACCC, went on and wrote that, in a major sector, a key competition issue often concerns protecting competition in the supply of major content to consumers. To a degree, this can preserve media diversity, but it will not be fully effective in doing so. Competition law are not an effective substitute for laws protecting media diversity.” end quote

 I mean, we cannot agree more with these wise words in a sense that there’s a real distinction between competition law, I mean, tackling and sanctioning abuses of dominant positions and those laws which want to foster media diversity. And of course, competition laws are not aimed at fostering media diversity, then more tailor-made laws are here, in order to foster media diversity. It looks like this code is pretty much taking this precautionary approach, ex ante approach that is detrimental to innovation, arbitrarily selects two companies out of those companies that were identified in a 2018 report. And just take one view of the problem without considering the reciprocal nature of the issue. And of course, legal certainty and innovation will deplete and transaction cost may increase. So it is for sure, according to the treasury, it’s a huge reform. But it might be, I mean a hugely harmful reform. And so, I mean, the Austrialian parliament will be called to consider that code and perhaps those considerations out of popular fervor, may be considered.

SIOLIS:

Okay, thanks Aurelien. some really good points there. Just on the value that Google and Facebook provide to publishers, I think the codes just been revised in the last few days to reflect that two way value exchange now, which I think is a good thing. So that reciprocal value exchange should theoretically be factored in. But what did I just open up to some of the others to comment on the code as well. Peter perhaps you can go first you discuss this as an introductory type.

LEONARD:

I think it is correct to characterize it as a ex ante precautionary regulatory intervention. And it doesn’t pretend to be an implementation of conventional competition law. And it pre-determines what the outcome will be, which is that there will be determination that money flows from the digital platforms to the media publishers. And it pre-determines that that will happen quite quickly, because it actually only allows a three month window for negotiation before the media publisher can send it off to arbitration and the arbitration then is a effectively a baseball determination, arbitration. So the media publisher proposes one number and the digital platform proposes another and the arbitrators obliged to accept one or the other.

So let’s not regard this as an implementation of conventional competition policy, it is a highly structured shake down of the digital platforms of certain digital platforms. By initially, one would imagine the large media publishers, and that then to pick up Aurelien’s point around the selection of the players, the government has lots of discretion to bring other media platforms into this regime, even when it’s so determines. So it starts with Facebook newsfeed and Google search and Lord knows where it will all in. One suspects that the outcome will be that a number of the publishers will negotiate commercial deals outside this regime because the outcome of baseball determinations is so problematic. It’s a little like Russian roulette, isn’t it? So, clearly, this is about trying to equal up bargaining power by some pretty strong regulatory intervention, but let’s not pretend that it’s anything like an application of conventional competition analysis.

SIOLIS:

Okay thanks. Go ahead, Chris.

BERG:

Yeah, I might jump in that George, I think Aurelien has summarized really compellingly the contradictions and the confusions and the peculiarities of this policy. I want to be really clear, this is from my perspective, an absolutely outrageous public policy initiative by the federal government. To the earlier point, it neatly defines how the low quality thinking from competition regulators about digital platforms in this space. The policy itself came from a long standing campaign, from news limited in Australia to try to get money out of the two major digital platforms, just the two ones because they’re the famous ones. They’re the big ones, Google and Facebook, because it had lost revenue from the migration of classified advertising to the internet, not classified advertising to Google or Facebook, bear in mind, but just they’ve lost advertising.

And they saw that there were much larger companies that had a different political profile in Australia. And they targeted them. And the Australian Government has done this in response. This has no coherent intellectual foundation, which I think has really spelt out. Clearly, this is an outright expropriation of funds from two companies, to two other companies, and potentially also to the public broadcasters ABC and SBS. It’s even more interesting. So I mentioned earlier that Australia is a small country. So these were a small country, talking about big foreign companies. I love foreign companies. But it’s really fascinating to say that this is a dispute between big American tech giants and the largest media organization in the world and News corporation, using Australian public policy to try to set a global standard.

I don’t think that we should, as analysts, as economists, as lawyers, I don’t think we should shy away from the fact that this is not about law. This is not about economics. This is pure politics, and pure rent seeking. And if this is the direction, that all these wonderful conversations we have about data and privacy and monopoly is going to go then that is highly regrettable. And it’s going to be terrible for innovation. I don’t know how hard I should go here, George.

SIOLIS:

I think it was fairly clear. Thank you, Chris. We’ll come back to some of the points. Actually, John, before we come to you, I just want to pick up a couple of copies that you can think about, while John’s talking. But the policies aimed specifically at dealing with an imbalance of bargaining power between the digital platforms. On the one hand, just Google and Facebook edition initially, at least in the news, media, businesses on the other. Imbalances in bargaining power are quite common. They’re everywhere you look. So if you’re looking to balance up imbalances in negotiating power and be bargaining power, you’ll have a job for life. But is there a point where that imbalance in bargaining power becomes too much?

Is there any point where we would think, from an economics perspective that you might want to intervene because you’re going to achieve bad outcomes in terms of efficiency, not distribution, from an imbalance in Belgium power. I don’t know. countries like Japan have got a specific abuse of superior bargaining power position prohibition in their laws. We don’t perhaps IOB is the dominant provision. Okay, can pick it up. But the question is, can an imbalance in bargaining power go too far? And is that one thing this code might be looking at? So Chris, perhaps think about that and others too, while John provides his points.

YUN:

So yeah, no, I really don’t think I can add much beyond what Chris, Aurelien and Peter have mentioned. And George I appreciate your comments on bargaining as well. I think that’s really a fair point. I think one of the things that, just to summarize broadly, I think regulation has unintended consequences, and Aurelien mentioned GDPR. And research is starting to emerge from that, I think Catherine Tucker and Liad Wagman and Ginger Jin, they’ve all started to look at this and it’s turned out that it’s really helping the incumbents. And it helps larger firms. They have the ability to have the resources to comply. They can spread it over more of their properties.

And it’s actually resulted in greater vertical integration, because it’s easier to comply when you own the property rather than contracting with a third party. And so all those consequences are starting to come to bear. And big surprise, it helps the incumbents. And I’m worried about that, in that, while I don’t know quite the details, as the other panelists on the precision of the code, and the revisions and the new proposals, but I would not be surprised if, in the end, we’re going to get the very same result. And I am also worried that it starts to align the interests of platforms and publishers. And one might think, well, how can be. They seem to be at odds and different sides of the table. And what I worry about is, once they have agreements in place, what it means for smaller publishers, what it means for smaller platforms. I don’t know.

And that’s the problem, we just don’t know, and regulations don’t allow the market to dictate and sell those things. And maybe we don’t want the market to sell them. That’s the precautionary approach. And we’re happy with the ex ante regulatory approach, but I worry about that. And also I’m just worried again, about favoring larger mainstream properties, mainstream media. At least in the US, and it probably is true in Australia, there’s a fairly low opinion of mainstream media. There’s a lack of trust, there’s a belief that there is bias for certain groups or another, whether that’s true or not, that’s a completely separate debate. But I worry again, that maybe you’re starting to entrench the larger players on both sides.

And again, does that really benefit the publishing industry as a whole or does it really benefit, as Chris mentioned, the rent seeking larger players, more specifically. And finally, I think there’s really an important division between the state and the media, at least, I’m guessing that’s true in Australia. It is certainly very true in the US, where there’s a long tradition that these things should be very separate from each other. Are we creating and I don’t want to overplay the point, I really don’t. But are we moving in towards the direction where the government is dictating a subsidy, or maybe equalizing the bargaining power, however we want to characterize it, and at the end, trying to give media companies more money due to government action.

Are we starting to align these two, and journalists, I think, work best when they’re independent, and able to, clearly criticize either side of the debate. And so I’m worried about those issues. And so those are the things that come to mind. Again, there could be benefits to it. I’m not dismissing those, but it tends to be that regulation works out in a way that helps the larger players.

BERG:

Can I jump on the bargaining PowerPoint George, as I’ve been listening and thinking about it as John spoken. Bargaining over what? So there’s this idea that there’s a imbalance of bargaining power between Google and Facebook and news limited, which is hard to fathom from my mind. But nonetheless, let’s say it exists. But there’s nothing for them to bargain over. So the accusation right now is that by linking to a news story on a social media platform, there’s some expropriation of wealth. There’s some externality, or at least providing the ability for users to provide a link on a website that requires some bargain between two companies.

Now, even if we didn’t believe that linking was the foundational technology of the Internet, and that to view that as a expropriation, or something that needed to be a matter of contracting. Well, if the Australian Parliament believes that is the case, then it should pass legislation to that effect. And to say that our property rights framework in Australia now controls the capacity to link to other people’s websites. I understand there are some concerns within news organizations about the rapidly changing algorithms. And I’m very sympathetic with that because sometimes these algorithmic changes on social media. Companies can live or die on those things. But that’s not what we’re talking about here. We’re not talking about those algorithmic changes, we’re talking about requiring firms to pay for the right to link to content for other firms. So while they may be in a bargaining balance, for argument’s sake, I just don’t know that that’s even relevant when it’s the government that is forcing them to make the exchange in the first place.

SIOLIS:

Interesting. Peter yeah.

LEONARD:

Yeah, look again I think we should call as we say in Australia, a spade a bloody shovel. Really what’s going on here is the government has decided that it wishes to impose a digital services tax on the digital platforms in respect of the dislocation of advertising dollars, from where they formerly resided, being in Australia on news media, to what might be regarded as a tax haven of global digital platforms. And to try and analyze this inconventional competition terms will simply not work because we’re applying inappropriate tools to describe the problem as the government sees it. And the government won’t describe the problem as it sees it, because he doesn’t want to use the words digital tax. But this is fundamentally about the relocation of advertising real estate. And we are taxing the relocation of that advertising real estate, because it’s actually moved out of the jurisdiction to digital platforms. And like it or not, that’s what the news media bargaining code is all about.

BERG:

I think that’s mostly right Peter, I just would be interested in your reaction. The advertising that really was lost and killed, the news media organizations was the classified advertising and that’s not the advertising that’s gone to Google and Facebook, Google and Facebook, it’s predominantly banner advertising. In fact, a lot of those rivers of gold, those classifieds went to properties owned by the news media organizations, because while it’s easy to be critical of them, in retrospect, they weren’t stupid. They set up domain.com.au and they set up Carsales and we’ve got Seek and all those sorts of things. That’s not the organizations that are being targeted though. It was interesting, the ACCC’s report actually just subtly recognize this. They’re like, “Oh, well, it’s not quite the same advertising,” but nonetheless, in the whole advertising world, unfortunately, the Google and Facebook tend to dominate. Does that change how you think about it, or how do you think about that?

LEONARD:

No. I just think that the nature of what people have built on the real estate has changed as it moved from a media platform to another service, and you can see the pervasiveness and the effectiveness of the digital platforms in capturing the value of advertising by the share of each dollar that the two major players capture.

Now, I actually don’t think that the change is, in that sense, a fundamental difference, but what it does illustrate is the power of data and analytics to enable what was a fundamentally changed advertising, digital advertising model, to enable that value to be captured in particular places. I do think, we come back to this question of the interrelationship of data, analytics, and where the eyeballs are, and the fact that advertising has moved from one location to another, and we’ve now decided to come in and tax the owners of the new real estate and dress it under a veneer of competition law.

SIOLIS:

Aurelien, the first point you mentioned was… Actually the second point that this code might deter innovation. I think you meant innovation on behalf of the digital platforms, but what about its potential to promote innovation on the other side of that, on the news media business side? Specifically that there’s a debate about the extent to which we’re able to invest in high quality journalism. I’m not sure what that is, because I haven’t really seen it much of it here in Australia, but there’s a debate about that. The question then is, if this is something we want, if we want diversity and plurality and lots of voices out there? Is it something that the government should fund directly rather than leave to Rupert Murdoch, and Mark Zuckerbeg to come up with with a deal?

PORTUESE:

I think that’s a key question. It’s a key question that we haven’t talked about, but which is underlying, is this vague idea of journalistic quality. As if we have today, very bad quality, and we have this nirvana fallacy. We know what journalistic quality will be, and we haven’t reached it yet. That’s the danger of the regulators putting his own preferences, instead of the consumer preferences. What I’m meaning is that, by this idea that we want to foster traditional news publishers, because this is journalistic quality. It assumes that digital platforms and news aggregator is bad quality. I mean, unfortunately, but it could vary consumer behavior. That the very fact that as Chris has explained, advertising is going perhaps from traditional news publisher to digital platforms, and we’ve seen these advertising revenues and we’ve seen this web traffic going to news aggregators.

Well, we see that the consumer’s behavior and the consumer preferences might perhaps evidence the fact that it’s not that bad quality and they like that. They click on it, they create web traffic, and they enjoy it. The danger is when you dislike consumer preferences and you want to put the regulators preferences at the expense of the consumers preferences, and of course, this is very opposite to competition law, because it will overtly harm consumer welfare, but it’s also dangerous. It’s also dangerous, because to what extent you want journalistic quality. I mean, if you want journalistic quality, perhaps you have better journalistic schools, right? You have better universities, better diploma, better training, and then you have better journalists. That’s what you will assume, but it wouldn’t just harm consumers and say, “Your preferences were bad. You always click on these Facebook links that go on the Daily Mail and these tabloids, and that’s very bad. I’m going to tell you what’s good.”

This is what precisely competition law, or even regulation in general shouldn’t be doing, because this just put the regulators into the shoes of the consumers, and we just don’t know what the consumers want. We can just evidence, and just see it, right? This is one big threat of all these implicit claims is about journalistic quality, and without saying it, or sometimes, well, just saying it, it assumes that Google and Facebook just generate bad quality journalism. Even though they are not journalists and they do not create journalism at all, they just aggregate news, and journalistic quality will not increase or decrease by taxing Google or Facebook, because the journalists are in the news a major, they are not in Facebook or Google.

There’s no journalists in Facebook and Google, so it just completely blurs the lines between who is doing what. Journalists produce journalism in those houses, and Google and Facebook just aggregate news. To what extent that will increase or decrease quality, to enforce these kinds of tasks, this is very unclear, and innovation will be harmed, because precisely you are clearly going against the consumers preferences in order to put regulator’s preferences.

SIOLIS:

Thanks Aurelien. Does anyone else want to come in on the quality journalism point?

BERG:

I mean, one of the interesting things in the ACCC report, I think Peter pointed out that the ACCC report into digital platforms had waxed lyrical about privacy and all these sorts of things. I mean, it was directed by the government to do this, but it also got involved in debates about how we should be funding the news media, how we should be… the fake news problem, all these sorts of things. Now, in Australia for better or worse, we have a public policy arrangement that is meant to fund high quality journalism in the ABC, which is a billion dollar organization, plus SBS, which is a third of that or something. We have a policy around high quality news production for better or worse, and I don’t think that we should be looking to competition policy to try to resolve what is a really challenging time for a media sector in its evolution.

Now I’m very positive about the media sector. I actually think that the internet has opened up vast new opportunities for innovation and entrepreneurship in the media, in journalism. I actually think that we get more and better now than we did even when there was the rivers of gold, but even so, that’s not a competition policy problem. It’s not our competition regulators job to take an industrial policy approach, to try to figure out how to fund sectors that it likes or thinks are important. That’s Parliament’s job, and we can argue about that in parliamentary settings, rather than regulatory ones.

LEONARD:

Perhaps I might just pick up on one point there, by way of ironical observation. The digital platform services inquiry, in its inception, was not intended to be a broad competition review of digital platforms. It was in fact, given the brief, because of debate in the federal parliament around how the “Australian” media organizations were being undermined in advertising dollars by the digital media platforms. Ironically, all of this started from the very issue that we are now discussing, and really, the government of the time kicked the ball to the ACCC, because it is the hot political issue of whether you artificially, by subsidy or by market intervention, support the failing news media sector. Ironically, we started from the very issue that we’re now discussing around the news bargaining code, but it has blossomed out into a very broad CMA style intervention in digital markets along the way.

SIOLIS:

Yeah. That’s a really good point, Peter. Thanks for that. Aurelien?

PORTUESE:

Yeah. I just want to add, on this discussion, and I think it’s very important to have in perhaps the broader view and say that we’re talking about snippet tax, right? These link tax we want to create, because it force Google and Facebook to publish these details and to pay these news publishers. The very fact that the Australian Parliament or the regulator want to fund the news publishers, that’s totally fine. What I’m saying is this is the carrot. To help those news publishers, that’s fine, but it doesn’t legitimize and justify the stick, right? It’s not because you want to bring a carrot to the news publishers, you can justify you’re going to put a stick on the other company, right? The question on competition on the merits is very important.

The other one, this company that is more efficient, more innovative, and truly divert advertising revenues from news publishers to these digital platforms. That’s good, and that’s perhaps innovative and efficient. Of course, some news publishers are harmed. What to do with that? I mean, competition on the merits will of course, harm these less efficient competitors. If you do nothing, that’s the market, and they will fade and go away. If the parliament wants to do something, they can subsidize it. But subsidizing some companies doesn’t mean taxing the other companies.

I mean, the very fact that the Australian Parliament want to create, advertise the news fund, or I don’t know, whatever you call it, that’s completely fine. This is a financial intervention. This is a real public policy intervention in the media policy. It doesn’t justify attacks on the competition side, so that you can sanction, you can slash the more innovative, more efficient companies. It’s just two sides of the same coin, that you’re not bound to flip the two sides at the same time. Right? You may want to fund. You may not want the tax.

BERG:

It’s really important that we dress it up as if it’s a market negotiation and we just need the government involved, because there’s a bargaining imbalance. That’s the issue.

PORTUESE:

Yeah. That’s the story.

SIOLIS:

All right. We’ve got five minutes left, so I’ll see if anyone’s got any closing comments, but I’ve just got one question for Aurelien and John, which is more for my interest. But my question is to what extent are people watching what we’re doing here in Australia, and how closely are they watching it John? I know that in the subcommittees report, the House subcommittee report, John, they referred to the stuff going on here, but how carefully are people seeing what’s happening here and how likely are the things happening here to likely to get an airing elsewhere?

YUN:

Actually, my view is that people are watching very closely. The ACCC has really started to make a brand for itself with its digital report, especially with its preliminary report, which they, I think, walked back, certainly for the final report, but nonetheless, that caught everyone’s attention, because there was a level of… And this was already mentioned by everyone, Chris and Peter, particularly about the funneling of sort of the problem starting with the regulatory approach first, and then maybe sort of looking around for the problem later. We usually associate this more aggressive approach with Europe, but Australia, with its proposal, sort of one upped it, and I think this really caught just about everyone’s attention. The Stigler report came afterwards, but it was almost as if it was already said by the ACCC.

The point being, is that I think the ACCC has created a brand for itself, and so I think whatever recommendations it makes, and certainly with the Australian Government, with this code that is somewhat aligned with what the ACCC has been recommending, I think will catch everyone’s attention. I think will then start to be imported over into U.S. policy discussions, certainly European policy discussions, and Aurelien already mentioned that it already is there in terms of a lot of these decisions in France and Germany.

The U.S., it hasn’t reached our point. I think the idea of subsidizing media companies has very little currency here. I think even the distaste with social media that some conservatives might have, the idea of then funding the larger media organizations is probably even more distasteful. That being said, though, I still think it will be very influential.

SIOLIS:

Aurelien?

PORTUESE:

Yeah. I think it is by nature, very influential, but because of the very nature of the Australian legal system, if you look at what I referred earlier is just the legal system of Australia is pegged with the UK one, and therefore very linked to the Europe, The Australian legal system is between Europe, UK, and American legal system, and that’s why it’s already influential in itself. I mean, despite the fact that Chris said that the competition already in Australia, can be only local office. That’s true. You can’t regulate the merger between Facebook and Instagram in Australia alone, but still it is highly regarded, and I think it provides justifications for actions.

If you look at the French decision which was taken while this code was being negotiated and announced, and the appeal court just confirmed these French competition decisions couple of weeks ago. I mean, there’s like echoing effect where perhaps Europe will take some judicial actions, and Australia takes some regulatory actions, but on both ways, it’s just the same objective that is pursued. I think it’s very influential. Whatever means, the goal is the same. Designating couple of digital platforms are the evils, and trying to just do, by regulations, what the market hasn’t done, and that’s it. It’s very influential already in Europe, and I’m sure in the USit would be influential following the House report to some extent. We can’t disregard, and we can’t minimize the detrimental effect, clearly, of these proposed codes throughout the world.

SIOLIS:

That’s great. Thank you. Any closing comments from anyone else?

BERG:

Look, the only thing I would say is that I think this discussion has revealed, or at least clarified to my mind, how under cooked the regulatory thinking is about these new digital platforms in this space. I think that I’m not convinced that data is a very good way to view concentration or consumer harm, but I’m a hundred percent convinced, and absolutely certain that privacy is a very, very poor way to think through competition policy. Viewing competition policy, as a mechanism to protect individual privacy well. I think Australian privacy policy and privacy law needs reform, but to have a competition regulator take the lead on that strikes me as, well, counterproductive, and it just won’t work.

SIOLIS:

Okay. Thanks. Peter, any closing comments from you?

LEONARD:

Oh, just really to echo Chris and to say that, because we haven’t, I think used the word right in this discussion. Privacy, at its heart, is a right for individuals not to suffer privacy harms, and that is an important right, not withstanding the challenges to it. To actually, in essence, treat data privacy solely as a consumer protection and competition issue is to completely misunderstand the proper role of data privacy and freedom from surveillance in a modern digital economy. I do think there’s a problem when you allow a competition regulator and consumer protection regulator to reframe a debate that really should be happening elsewhere. Unfortunately, in Australia, we tend to conflate debates, and often dress them up as competition debates, when in fact they are debates that should be being addressed elsewhere. The ACCC commenting on data privacy, and what we’re doing on the news bargaining code is a classic example of dressing up issues as competition issues, where they should be addressed elsewhere.

YUN:

I just want to say, thank you, George, for keeping the conversation going and for Chris, and Peter, and Aurelien. I can really just listen to you guys speak on these issues at length. Thank you for your thoughts, and I’m really honored to be part of it.

BERG:

I can yell about the Australian Government for hours.

SIOLIS:

Okay. Look, I think that’s it. I agree, these are tough issues, and Peter, I agree. I think we do tend to conflate things here, and I’m not convinced we’re going to end up in the right place with some of these things, but we’ll wait and see. Thanks very much to all of you for expressing your views so clearly, and for contributing to this. I hope you also found it useful, so thank you. Thank you all for your time, and goodbye.

LEONARD:

Absolutely.

YUN:

Thanks very much.

LEONARD:

Thanks everyone. Stay safe.

PORTUESE:

Goodbye.