Australia’s competition watchdog will push for a broad range of significant antitrust reforms aimed at curbing the market dominance of global Big Tech giants such as Google and Facebook.
Proposals put forward by the Australian Competition and Consumer Commission (ACCC) in a new discussion paper include a new regulatory framework targeted squarely at digital platforms, reforms to merger rules, data-sharing requirements, and classing these tech firms as “essential facilities” in line with telecommunications infrastructure.
The ACCC released its fifth report as part of the five-year Digital Platform Services inquiry on Monday morning, focused on potential areas of legislative reform to address the dominance of large technology companies.
The ACCC is consulting on these proposals for the next month, and will present a final report on reform recommendations to the Treasurer in September this year.
The discussion paper looks at measures to address the market domination of Big Tech firms, including a “suite of prohibitions and obligations” for the digital platforms, new codes of practices, additional powers for the regulators, data-sharing requirements, reforms to merger laws and better dispute resolution mechanisms.
Outgoing ACCC Chair Rod Sims said the halfway point of the competition regulator’s digital platforms inquiry is the right time to look at substantial legislative reforms.
“Now is the time to consider whether further reforms are needed to supplement the important tools in Australia’s competition and consumer law to maintain a vibrant digital economy that drives innovation and enhances productivity,” Mr Sims said.
“These platforms hold powerful positions in the economy and society and can often dictate terms to businesses that use their services. This in turn can harm consumers and the small businesses that rely on them, including through higher prices, greater use of personal data, reduced choice, less innovation, or lower quality products.”
The ACCC is looking to provide recommendations to the federal government on updating competition and consumer law for digital platforms due to ongoing concerns that the current powers are “insufficient” in dealing with these companies.
“The ACCC has growing concerns about the entrenched and durable nature of some large digital platforms’ market power and their gatekeeper role, and the impact this has on consumers and business users, especially given the growing reliance of businesses and consumers on a range of digital platform services,” the discussion paper says.
The competition watchdog is considering a new framework specifically designed for digital platform services, rather than relying on the existing enforcement action under competition and consumer laws.
“A new regulatory framework could address structural problems in markets for the supply of digital platform services by addressing market contestability issues such as barriers to entry and expansion, multi-homing and switching, to help keep markets open to entry and expansion,” the paper said.
The ACCC is also considering legislation to address specific identified harms, such as the News Media Bargaining Code, introduced last year, but said that a broader approach to reform would be preferred.
The discussion paper looks at a possible suite of prohibitions and obligations in legislation to apply to these tech firms, and new codes of practices outlining clear standards of acceptable conduct.
The federal government could also adopt a similar approach as in the energy sector, with a regulator given powers to develop and implement rules that apply to digital platforms. This would be a more flexible and adaptive approach to regulatory the Big Tech firms, the discussion paper said.
Some of the most significant reforms floated in the ACCC discussion paper relate to merger and acquisition laws.
The paper floats the idea of bespoke, tailored merger rules just for large digital platforms, including a requirement that the competition watchdog be notified before a merger or acquisition takes place, changes to the probably threshold in relation to potential impact on competition, and a reversal of the onus of proof that a buyout won’t impact competition.
“Given the particular risks of under-enforcement in digital platform markets and the potentially long-lasting and substantial harm associated with the acquisition of often very nascent competitors, it may be appropriate for a specific notification threshold to apply to acquisitions by the largest digital platforms,” the paper said.
The ACCC is also considering calling for stronger prohibitions on certain categories of acquisitions, including blocking tech firms from acquiring businesses operating in the same or adjacent markets.
Another policy proposal in the paper is for companies like Google to be classed as “essential facilities” and treated in the same way as infrastructure such as telecommunications. This would mean that these companies would have to provide third parties with access to data, and give consumers the option to change their default settings.
The government may look at new measures to prevent these companies self-preferencing their own services, requirements for interoperability and data portability and the siloing of some user data.
In 2019 the ACCC recommended minimum internal dispute resolution standards and the creation of an independent ombudsman to resolve complaints and dispute from small businesses and consumers in relation to Big Tech firms.
This has not been adopted by the federal government, and the competition regulator reiterated this recommendation in its latest discussion paper.
“The ACCC is concerned by the persistent lack of accountability and effective redress for complaints and disputes arising on digital platforms, both for consumers, advertisers and a range of business users of digital platform services,” the paper said.
Do you know more? Contact James Riley via Email.