Digital Platforms Inquiry
AiMCO Influencer Marketing in the Frame
Episode#1 - 15 Minutes in the Frame - Patrick Whitnall with Stephen von Muenster
Unravelling Digital Platforms Inquiry and Data Privacy
Patrick Whitnall, Deputy Chair of AiMCO who is one of the industry’s leading social media marketers, AiMCO chatted with Stephen von Muenster Partner at Von Muenster Legal about the Digital Platforms Inquiry and implications for the industry and influencers.
Patrick Whitnall:
In this episode, Stephen von Muenster will share with us the impact the Digital Platforms Inquiry could have on influencer marketing.
Stephen is a practicing solicitor and partner at Von Muenster legal, specialist technology, media and communications firm. Stephen has specialised in advertising, communications, marketing and media law since 1995. He has developed a keen interest in emerging technologies, media, and interactive digital media landscape in recent times, and has advised extensively upon disruptor technology platforms, social media, online reputation management and artificial intelligence technologies. Presently he is assessing the ACCC response to the digital platforms inquiry, and the related ad tech inquiry and providing assistance and guidance to the industry and agencies.
Welcome, Steven. At Mumbrella 360, in November you gave an overview of the Digital Platforms Inquiry by the ACCC outlining the key elements regarding the protection of consumers and their privacy and personal data, the regulator court actions and what the future may hold. What would you say would the take-outs of that summary for you?
Stephen von Muenster:
It is a very broad area, it would have been difficult to envisage only 10 to 15 years ago just how much of an impact on our society, digital platforms and social media would have had. Today it transcends everything we do in our daily lives. The Digital Platforms Inquiry (DPI) came about because of the issues that started to arise with the big technology companies and leaks of data and problems that are associated with that transparency issue.
There's been a lot of benefits to society from the digital platforms and social media, but there's also somewhat of a dark side. And our government, The Australian Federal government decided to step in and do something about it. The ACCC is the competition regulator, the consumer protection watchdog in Australia, and they were directed in December 2017 to look into the digital platforms, privacy, data and the whole competition in the ad tech world.
In July 2019, some 800 pages of a report was released. It's an extensive report and the government responded in December 19 and as a result of that report, a number of further inquiries was formed. One of them is the Ad Tech Inquiry, which is very much looking at the technology stack and the players in that market. And it's all about the complexity and opacity of ad tech within digital advertising and ad agency services. The final report is due to be provided to the government on the 31st of August 2021. They just released an interim report, February 2021. They've pretty much said that there’s a real problem, a real lack of competition in the digital advertising supply chain in Australia. And that's very interesting, because obviously Google has a dominant position.
How does it affect influencers? Well, influencers are part of the digital economy and are part of that chain that gets consumers eyes onto the screen and seeing the advertising the promotion of products.
In addition, an interim report for the general DPI came out in October last year which focused on consumer protection and privacy on messenger services such as WhatsApp iMessage and Facebook Messenger. We're seeing a lot of thing happening at the moment - there are three major court cases going on: two against Google, and one by the ACCC and one against Facebook by the Office of the Information Commissioner in part focusing on what happened with Cambridge Analytica.
So, there’s a lot going on and we're going to see some significant changes and regulation for those in the whole ecosystem of digital that have personal information and data as their business model and centre of gravity. And we'd have to argue that today. That's almost everybody.
Patrick Whitnall:
Let's try and take a guess that 800-page report and try and distil it down.
I thought we should break this up into impacting four parts:
the buy side, being media agencies, social and PR agencies
the sell side including the influencer technology companies,
the talent and talent agencies; and lastly,
the social platforms.
So, let's get into the buy side.
Q: Media agencies, social and PR agencies will use data to inform their discovery, selection and reporting of influencers. How will this impact them? And do we assume then that this restricted data will make it harder to target consumers and select influencers?
Stephen von Muenster:
Well, I think what we're going to see that the way in which influencer's data is used to discover select and record against influencers will be under more strict control because a lot of that information is personal information, and data to the influencer.
Eventually there will need to be a change in all things that influencers will need to agree to in the perspective of using the influencer data in respective media, social PR agencies, because they're part of the technology stack. They will also be subject to these transparency requirements concerning the entire process. So, they'll need to be more transparency - that will be advertisers, on the one hand, influencers on the other and everyone in between in their tech stack.
So, will it make it harder to target consumers?
Yes, in the sense that there will be more systems and processes and disclosures that will need to be made. But those getting across it and know what to do should be able to get on with hopefully with business as usual, in a more transparent way.
Patrick Whitnall:
So then let's turn to the influencer technology businesses, or what could be referred to as the sell side. These are the businesses that are connecting influencers to brands and agencies. Access for some of them has already been impacted by the Cambridge Analytica scandal. So how much further will this reach now for them?
Stephen von Muenster:
This will influence them because they are the ones that are really the middleman, they are that they are introducing the influencers, as you say, to the media agencies and their clients and the advertisers. They're the ones who will have a regulatory regime that will become quite strict.
Once we eventually see these laws come to pass from these various ACCC inquiries, and we’re talking 12 to 36 months down the track, they will need to have far more transparent and compliant business models, they'll need to have very fair and transparent agreements and contracts with the influences that they use.
So, they will be impacted. But of course, one of the greatest impacts those side businesses will have is how much the platforms themselves will allow the access to the backend. And each influencer platform, or influencer trends transparency business, that I've seen in as a lawyer in the space, has a different way and a different need in that regard. But as you mentioned, there's been quite a bit of tightening going out. So that will be impacted through the platforms as well.
Patrick Whitnall:
Okay, so let's think then about the influencers themselves. For many, they I guess, independent businesses and consumers themselves, their value is in their content and their data, which is something that's demanded by the buy and sell side, are we taking away one of their valuable assets? Are we restricting their business? Or is it just simply allowing them to understand how their data is being used?
Stephen von Muenster:
I think there's a fundamental preliminary question, is it their data? And is it their asset? And it's that's an exceptionally important question, because who owns it, we can define personal information as being something that identifies an individual.
One thing for listeners to understand is that the definition of personal information will change and will become more what we currently think to be anonymized data will be defined to be personal so will be caught by the laws. But I'm talking about the personal information and asset that a creator builds on a social platform. Who owns that or the platform actually owns it?
As Donald Trump found out, very recently, with his entire Twitter account being deleted, he didn't know own it at all. And so, I think what's going to happen is we're going to see the platforms effectively preempt legislative reform and they’re going to tighten things up. They're going to be the ones that will dictate what can and can't happen with an influencer’s data, but yes, it will make it more restricted for some influencers, but hopefully, we'll see a levelling out of the playing field and transparency will then come to the fore.
Patrick Whitnall:
Lastly you touched upon the social platforms. For them, I guess the self-regulation seems to be their favourite direction, will this have any impact for them at all?
Stephen von Muenster:
It will, because they are the main reason that the Digital Platform Inquiry came to be, and it effectively opened the Pandora's box by shining a light on the dark practices of data capture and data sharing. I think self-regulation and a self-regulation model has failed, because it has all been lost in the technology and business models. They will prefer to self-regulate, but it’s clear that they're going to get regulated. And that will happen through privacy laws, consumer laws and the mandatory codes of practice that the platforms will be subject to. And we're going to see that tightening.
Depending on which platform we're talking about, some will be more open to it than others. But we will see them changing their rules to comply with the laws. And one of the big changes we will see in Australia is that we will start having a GDPR privacy regime similar to the EU, which is a much tighter and more protective version for consumers than we have today. At the end of the day, will it have an impact? Yes, it will, how they are going to tighten up will depend on the platform. But their terms of use and the terms of service will change, and it will impact influencers, agencies and clients, sell side supply side businesses.
Patrick Whitnall:
When the terms and conditions get updated, I wonder how many people are actually just pressing accept and not really looking at the T’s & C’s in there. So, there's a lot going on there. Clearly given it’s an 800-page document, we could be talking forever on this.
Finally, though, Stephen, thinking about how far reaching this inquiry could go, let's just finish with is this a good thing?
Stephen von Muenster:
And again, of course, this is only my opinion, I suspect that a little bit like the Wild West eventually was tamed. And that was a good thing that justice and laws came to the Wild West. We've seen that historically in many, many sectors where there's been a wild west, and then eventually regulation crept in, and an order came in the Law of the Sea is just like that, that started hundreds of years ago.
So, we're seeing the Law of the Sea, for digital and social coming into place, I think it will be a good thing, particularly on the influencer side, as if we think of them as a consumer, they will have more choice, consent and control.
I call it the three C's. And they're really effectively the touch points I see coming out of the platform's inquiry and the court cases at the moment, and I can summarise it in three words: it's choice, consent and control.
They will have more choice about what is being done with it (data) As with other consumers, they'll have to give consent to that on an item by item or a granular basis, rather than some broad consent, they'd forgot about, as you mentioned, just clicking on accept, there'll be more than that there'll be actual physical thing they have to do. And then thereafter, they'll have control what happens to their information. And that will be a good thing.
The only chilling effect that I have some concerns about, as would perhaps everyone in our influencer ecosystem at the moment, is whether it'll slow down the selection of influencers, whether influencers and consumers will have less choice and less personalisation, less commercial benefits available to them because of effectively, regulation. But I suspect as time goes on, they will harmonise, and we will just have a more open and transparent system that allows commerce to get underway. The Federal government won't allow the very valuable multibillion dollar industry that is digital advertising in the broad sense to be stymied by other regulation. And so, we'll need to see what that looks like as we are just forecasting at the moment.
Patrick Whitnall:
Steven, so much still to talk about. And I'd love for us to perhaps potentially come back to you when there is an update in this space. But in the meantime, if people want to learn or understand or get in contact with you, what's the best way of doing that?
Stephen von Muenster:
If people would like to have a look at our website at www.vonmlegal.com We have a knowledge centre which actually has a significant summary on this subject.
Happy to talk people through the issues as I see them. And we'll be trying to give the industry some more insights and help as we can.