James Riley
July 25, 2019

US antitrust move to follow ACCC

Competition

US antitrust move to follow ACCC

Washington: The US opens an investigation of the Big Tech

Just weeks before the Australian government publicly releases the final report from the ACCC’s landmark tech platforms inquiry, the US government has opened its own review of the market power of the global digital giants.

A US Department of Justice statement issued on Wednesday said its Antitrust Division was reviewing how the “market-leading online platforms” had achieved market power and whether they “are engaging in practices that have reduced competition, stifled innovation, or otherwise harmed consumers.”

The statement does not name the companies at the heart of the review, but given its focus on “search, social media and some retail services online,” it appears to target companies like Google, Facebook, Apple and Amazon.

Australia has been a first-mover in the investigation of the market powers of Big Tech, particularly in relation to its impact or otherwise on media and advertising.

The Australian Competition and Consumer Commission (ACCC) was directed by the then Turnbull government in late 2017 to investigate the “impact of digital platforms on competition in media and advertising services market, in particular in relation to the supply of news and journalistic content”

The “world-first” ACCC platforms inquiry had been one of the conditions demanded by the Nick Xenophon Team in exchange for its support for Turnbull-era media reforms.

That inquiry was completed at the end of June and has been handed to government. It is understood Treasury will publicly release the report in the next three weeks.

The ACCC report and the response of the Australian government will be closely watched by regulators from around the world.

ACCC chair Rod Sims had placed the Australian inquiry within an international context from its beginnings, and had encouraged other governments around the world to also look at it as a “global issue”.

“It is important that governments examine the role these companies are playing in society, and, as with other companies, determine if policies are needed to curb their pursuit of profit given the problems such pursuit will cause,” Mr Sims told an international media conference in June last year.

“The growth of digital platforms and their immense data gathering represents something new that has not been previously encountered in the entire span of human history.

"It is little wonder that governments, businesses and individuals are grappling with this seismic shift. It is truly unprecedented, and it must be better understood.”

In the US, the DoJ said it would consider the widespread concerns that consumers, businesses, and entrepreneurs have expressed in relation to search, social media and online retail services.

Specifically, it will investigate whether or not business practices in the digital world had stifled competition or had a negative impact on innovation.

“Without the discipline of meaningful market-based competition, digital platforms may act in ways that are not responsive to consumer demands,” said Assistant Attorney General Makan Delrahim of the Antitrust Division. “The Department’s antitrust review will explore these important issues.”

The Justice Department statement concluded: “The goal of the Department’s review is to assess the competitive conditions in the online marketplace in an objective and fair-minded manner and to ensure Americans have access to free markets in which companies compete on the merits to provide services that users want.

“If violations of law are identified, the Department will proceed appropriately to seek redress.”

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