The competition watchdog will gain extra resources to crack down on the growing power of digital platforms as the Government seeks to rein in how companies like Facebook and Google use their market power.

Key points: The ACCC will develop a voluntary code of conduct to govern Facebook and Google's relationship with media businesses

The ACCC will develop a voluntary code of conduct to govern Facebook and Google's relationship with media businesses The Federal Government will also review the Privacy Act to give Australians greater power for how their data is collected

The Federal Government will also review the Privacy Act to give Australians greater power for how their data is collected The Government will spend almost $27 million to bolster the ACCC's power to monitor digital competition

The Australian Competition and Consumer Commission (ACCC), in a 600-page report released in July, called on the Federal Government to take action on the market dominance of Facebook and Google in Australia.

The Government, in its response to that report, confirmed it would spend almost $27 million for a new unit within the ACCC to monitor competition within digital platforms.

The ACCC will also be tasked with developing a voluntary code of conduct to govern the relationship between digital platforms and media businesses.

"The rules that exist in the real world need to exist in the digital world," Prime Minister Scott Morrison said.

"If it's the wrong thing to do in the real world, then it's the wrong thing to do in the digital world."

The Government has agreed to review the Privacy Act, which the ACCC wants strengthened to give Australians greater power over how their information is collected.

The ACCC report made 23 recommendations and noted a "substantial disconnect between how consumers think their data should be treated and how it is actually treated".

Mr Morrison said he wanted the ACCC to be a world-leader that ensured digital companies were regulated and Australians, particularly children, protected from abuse.

The Government has supported, in varying degrees, 18 of the 23 recommendations. It refused to support two of the ACCC's recommendations and noted the remainder.

The ACCC recommendations that were rejected included a mandatory takedown code to assist copyright enforcement on digital platforms and an overhaul of taxation settings to encourage philanthropic support for journalism.

Treasurer Josh Frydenberg said he would direct the ACCC to investigate advertisements appearing on websites.

He said if a voluntary code of conduct wasn't adopted, the Government would pursue a mandatory code.

"The Government will be seeking an update from the ACCC on the development of these codes by May and we're expecting that a voluntary code will be entered into by November," he said.

"If no voluntary code is satisfactorily entered into, the Government will move forward with a mandated regulatory outcome.

"So the companies are on notice. The Government is not messing around. We will not hesitate to act."

The ACCC's preliminary report, which was released in December, found that Google and Facebook had "substantial market power", but stopped short of calling for a break-up of the media giants.