ACCC chief seeks tighter Big Tech regulation

Denham Sadler
National Affairs Editor

Competition tsar Rod Sims has pushed for further regulation of Big Tech, including strengthened merger rules and unfair practices prohibitions.

Mr Sims, the chair of the Australian Competition and Consumer Commission (ACCC), addressed the National Press Club on Wednesday outlining the increased importance of tackling market power in the wake of the COVID-19 pandemic.

“A strong recovery will depend on a competitive economy so we want the innovation, efficiency and restructuring our economy needs, without the damaging consequences from market power being leveraged to the detriment of competition and consumers,” Mr Sims said.

“The issue comes down to whether we want an economy benefiting consumers and allowing small businesses to thrive, or one that allows the strong to grow stronger by whatever means,” he said.

Big Tech bottleneck: ACCC chief Rod Sims wants better controls on mergers and trade practices

“While we have all benefited greatly from their innovation, we must now ensure the innovation of others is not stifled. We may well need more regulation of digital platforms.”

The ACCC is working towards finalising its news media bargaining code for Facebook and Google and has faced significant backlash from the tech titans over the plan to force the companies to enter into revenue-sharing agreements with media companies.

But much more needs to be done to curtail the market power of the likes of Google and Facebook, and other large players in different sectors, Mr Sims said.

The competition watchdog will be putting forward changes to Australian merger laws next year, with Mr Sims saying this will “trigger an important debate”.

“The importance of these issues will only grow in a COVID-19 world with perhaps many failing firms, and a more digital world. Currently our merger laws cannot prevent all inappropriate increases in market power,” he said.

“However, where you draw the line on which mergers proceed and which should not is complex.”

The ACCC’s digital platforms inquiry final report recommended that Australia’s merger laws be updated to better take into effect whether an acquisition has the potential to substantially lessen competition, and for advance notice to be given to the regulator.

These reforms are needed to prevent market concentration and to lessen the dominance of big tech firms, he said.

“There is no doubt Facebook and Google achieved their dominant market positions in search and social media essentially by excellent and beneficial innovation,” Mr Sims said.

“But how much stronger and more entrenched is Facebook with its very many and continuing acquisitions, including Instagram and WhatsApp; and Google with its numerous acquisitions including YouTube and the digital advertising intermediary DoubleClick?”

“We need as a society to ask how much market concentration do we want to tolerate?”

The ACCC has not won a contested merger case since the competition test was weakened in the early 90s, Mr Sims said, because it has to prove on the balance of probabilities what is likely to happen if the merger does or doesn’t take place.

The competition watchdog will also be pushing for the introduction of unfair practices prohibitions, which would make it illegal for a digital platform to not remove a known scam or for companies to use data to target sales at individuals when they are at their most vulnerable, for example, Mr Sims said.

There will be a “sensible outcome” to the news media bargaining code in the “not too distant future”, Mr Sims said.

“The digital platforms – Google and Facebook – clearly have market power. It is simply extraordinary how the digital platforms continue to reject that they have market power when everyone else sees it as obvious,” he said.

“Further, their ‘take it or leave it’ attitude to dealing with news media businesses is damaging journalism, which in my strong view is essential to our society.”

Do you know more? Contact James Riley via Email.

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