Australian Competition and Consumer Commission chair Gina Cass-Gottlieb has decried Big Tech’s conduct as anti-competitive, a handbrake on innovation and harmful to consumers, after the regulator spent six years examining digital platforms and services.
In her speech to the Monash University Conference on Opportunities and Challenges in the Digital Revolution on Friday, Ms Cass-Gottlieb said the regulator “believes significant new measures are required”.
“The scale and range of anti-competitive conduct occurring across digital platform services presents a real challenge for regulators. The competition and consumer harms we’ve uncovered are widespread, entrenched, and systemic and cannot be addressed with enforcement action under current laws alone,” Ms Cass-Gottlieb said.
“Last year we released our fifth report as part of the Digital Platforms Services Inquiry. That report recommended options for regulatory reform to address the significant competition and consumer harms we’ve observed.”
Recommended reforms in the fifth interim report include better scam reporting, the introduction of a mandatory dispute resolution processes supported by a new digital platform ombudsman scheme, a requirement to verify certain business users such as advertisers, app developers and merchants, and requiring the disclosure of how reviews on the platforms are verified.
It also recommended the introduction of enforceable service-specific codes of conduct that target anti-competitive self-preferencing, tying and exclusive pre-installation arrangements. This includes barriers to switching between platforms and increasing transparency of market participants.
Ms Cass-Gottlieb said these measures would ensure the benefits of digital services continue to be reaped while also reducing risk to consumers and business.
The ACCC just passed the halfway point of its five-year Digital Services Inquiry which has included search, app stores, online private messaging services, and electronic marketplaces to date.
Among the harms observed, Ms Cass-Gottlieb highlighted that the entrenched service providers “often act as gatekeepers between businesses and consumers”, which elevates the potential for harm above that of many other sectors.
Consumers and businesses are left with limited options “but to agree to the ‘terms of trade’ of those digital platforms, which leads to “higher prices, poorer quality services, and businesses being punished if they compete head-to-head with a powerful platform”, she added.
While giving several other examples of legal action against Big Tech in Europe and the United States, Ms Cass-Gottlieb bemoaned that it “has not led to a sustained change in the conduct of the largest digital platforms or their core business models in digital markets”.
For example, Ms Cass-Gottlieb noted that “Epic Games instigated proceedings against Apple in 2020 and Google in 2021 over the platforms’ in-app payment requirements in Australia”, but these cases will not go to trial until March 2024.
The European Union has already taken steps to restrain the market power of ‘gatekeeper’ digital service providers and misleading or manipulative practices following the adoption of the Digital Markets Act and the Digital Services Act by the European Parliament last July.
The ACCC chair also highlighted that in Germany a “super-powered enforcement tool” for regulating anti-competitive behaviour by digital platforms exists, and in the coming months the United Kingdom is expected to pass a pro-competition regime that would create new obligations through platform specific codes of conduct.
Examination of digital platform markets by the competition regulator began in 2017 before undertaking an inquiry into “the supply of digital advertising technology and agency services” in 2020 and 2021.
The ACCC’s sixth interim report under its Digital Platform Service Inquiry, focusing on social media services, will be handed to the Treasury at the end of March.
The regulator has also begun examining the “web of interconnected products and services” offered by Big Tech giants Google, Amazon, Apple, Meta, Microsoft” earlier this month, which will be the seventh interim report.
The ACCC last September provided Treasurer Jim Chalmers with a list of recommendations to begin its plan for new consumer protection laws and enforceable service-specific codes of conduct.
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