Andrew Bragg (NSW, Liberal Party) Share this | Hansard source

I present the report of the Economics References Committee on the influence of international digital platforms, together with an accompanying document. I move:

That the Senate take note of the report.

The context for this inquiry was that the ACCC has been doing a large body of work in relation to digital platforms under this government and the last. This is a very slow but important body of work, and so the Senate, in its wisdom, decided to establish an inquiry to look at these matters. I thank the Senate very much for giving us the opportunity to do this important inquiry. At the outset, I give my thanks to Senator Walsh, the deputy chair, for the way that this process has been conducted; to all the members of the secretariat; and to all the other senators that participated.

The basic point to come out of this inquiry is that large tech companies are very lightly regulated in this country. Compared to a bank or a telecommunications company, they face virtually no regulatory burden. That is a major problem because, in our society today, we have a situation where big tech companies know more about us and have more power and influence over our society than, I would say, any monopolist has had in history. They make the robber barons look like they are not very powerful people at all, in a historical context.

Of course, it's difficult to try and work out what to do here because we're talking about global companies operating across multiple jurisdictions that have huge cultural power and have been very successful at evading regulation—and, of course, that is part of their approach. So, rather than setting out 20 or 30 unreadable recommendations, this committee has proposed just eight. We start off with a recommendation that deals with the significant fragmentation of our approach here in this country. We basically have four institutions—the OAIC, the ACCC, the eSafety Commissioner and ACMA—that have some jurisdiction in relation to digital platforms. These are not organisations that are working together on the big issues of the day, certainly not in any public way. We had to FOI the meetings of the so-called DP-Reg organisation, which is a group of people from these agencies that get together to talk about issues in order to work out what was going on from a coordination sense.

Our first recommendation is that we believe that the country would be well served by having a proper consolidation of these regulators so that they are able to deal with the multifaceted challenges that the big platforms pose. This committee was not a rerun of the social media inquiry or other inquiries. It looked at competitive restraints and it looked at where there were problems where people were being exposed to organisations that had too much power and were not sufficiently regulated in any form.

The next set of recommendations went to the bundling of products and services. There were significant submissions to the committee received that large tech organisations would bundle payment services alongside products in order to evade competition and in order to lock down their very strong monopoly position. Because, of course, in a practical sense, if you think about this, if you control the hardware of a phone or a physical platform like an iPad and you control the operating system and the software and the apps, you have a vertical integration which is unique and it allows you to have a completely unfair market bargaining position. So we have sought to address that issue in that recommendation of unbundling.

One of the features of banks and telecommunications organisations in this country is that they do face a high regulatory burden. One of the other processes we are undertaking in this committee is an inquiry into the corporate regulator ASIC, which has not been a strong regulator. Although the parliament has enacted very strong laws, we have not seen large corporations face the full force of the law and that has caused great anguish in our community. But having said that, the starting point is a sound point that they do face a high regulatory burden. One thing that a bank and a telco must have is mandatory dispute resolution. They must provide that as part of their service offering.

Another thing which occurs in other parts of our economy is that consumers can access a small claims tribunal. These are the most powerful and pervasive companies in the history of capitalism; therefore, we have recommended that there be dispute resolution and we recommended that there be a small claims tribunal. These are very reasonable recommendations.

When we were in government, I chaired the inquiry into the media bargaining code and I well remember the threats that were made by Google and Facebook. Google was going to leave Australia and leave billions of dollars of advertising revenue on the table, and Facebook was going to turn off all their community pages. We held the line as a parliament and we were able to win the day on that. But these big tech companies, in my estimation, will do anything to evade regulation. But if we're able to tilt the scales in favour of the typical Australian by giving them access to mandatory dispute resolution and a tribunal, it would make a big difference when there is a problem with these big tech organisations.

Finally, we were able to meet with the Frances Haugen, the Facebook whistleblower, who was able to give us some very interesting information based on her insider status at Facebook. We have recommended that there be transparency measures which apply to these companies based on a certain turnover. They would have to disclose the information relating to their algorithms. They would have to disclose how they target advertising, what sort of information they are collecting on people and how they are using it. I think these are pivotal recommendations.

We also recommended a right under Australian law that would allow people to delete their data. They should be able to delete their data from a digital platform if they so wish, provided that that does not create any foreseeable law enforcement issue. The last recommendation we made was in relation to the utilisation of children's data. We recommended a special code for the collection and use of children's data, which could be, as with media bargaining, a bill of this parliament. This would protect children who, I believe, are the most vulnerable to the size and the scope of these organisations.

In essence, the committee has conducted a very lengthy review. It has fundamentally recommended that these organisations be regulated as if they are utilities. I think this is sound. I think that these are achievable things that we should do. The basic principle here is that, if the organisations want to do business in Australia, we shouldn't feel as if we cannot apply a reasonable standard of regulation to them. They will always resist it, but it is achievable. We have the precedent in relation to media bargaining. That has now caused a regulatory contagion, and other jurisdictions now have similar laws to Australia's in relation to media bargaining. We should do the same as we have done on media bargaining and on esafety and go further to regulate these organisations as if they are utilities. If we don't do this, I believe they will be even further out of control in future and even harder to rein in.

I want to again thank the secretariat and Senator Walsh, in particular, for the way in which this inquiry was conducted.