Australia to 'lift veil' on Facebook, Google algorithms to protect privacy

SYDNEY (Reuters) - Australia said it would establish the world’s first dedicated office to police Facebook Inc (FB.O) and Google (GOOGL.O) as part of reforms designed to rein in the U.S. technology giants, potentially setting a precedent for global lawmakers.

The move tightens the regulatory screws on the online platforms, which have governments from the United States to Europe scrambling to address concerns ranging from anti-trust issues to the spread of “fake news” and hate speech.

Australian Treasurer Josh Frydenberg said the $5 billion fine slapped on Facebook in the United States this month for privacy breaches showed regulators were now taking such issues extremely seriously.

“These companies are among the most powerful and valuable in the world,” Frydenberg told reporters in Sydney after the release of a much-anticipated report on future regulation of the dominant digital platforms.

“They need to be held to account and their activities need to be more transparent.”

Canberra would form a special branch of the Australian Competition and Consumer Commission (ACCC), the antitrust watchdog, to scrutinize how the companies used algorithms to match advertisements with viewers, giving them a stronghold on the main income generator of media operators.

The new office was one of 23 recommendations in the ACCC’s report, including strengthening privacy laws, protections for the news media and creating a code of conduct - requiring regulatory approval - to govern how internet giants profit from users’ content.

Frydenberg said the government intended to “lift the veil” on how the firms collected and monetized users’ data, and accepted the ACCC’s “overriding conclusion that there is a need for reform”.