ACCC to probe Big Tech’s growing ‘web’

Australia’s competition watchdog will examine the growing “web of interconnected products and services” offered by Big Tech giants Google, Amazon, Apple, Meta, Microsoft in its latest digital platforms probe.

The Australian Competition and Consumer Commission (ACCC) launched a new inquiry into the “expanding ecosystems” of the digital platforms providers on Wednesday, with a view to report to the Treasurer in September.

It will be the seventh interim report produced by the regulator as part of the five-year digital platforms inquiry that began in 2020, with previous reports assessing areas like browsers and search and digital advertising.

The report will focus on the competition and consumer harms that may arise as large providers of digital platform services continue to expand into a “vast array of interrelated products and services outside their initial or core offerings”.

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These include artificial intelligence, virtual and augmented reality, education technology, health devices and services, financial technology, gaming and media streaming, but the ACCC intends to focus on smart home devices and cloud storage and computing.

ACCC chair Gina Cass-Gottlieb said that with consumers and businesses increasingly reliant on the products and services offered by digital platforms, it is “crucial we examine how these companies are expanding their reach”.

An issues paper is calling for submissions on the impact of “expansion strategies” that involve using existing datasets and user bases to rapidly expand into related markets, which in some cases involve “replicating features of competitors or new entrants”.

As part of this, the ACCC is keen to understand the “extent to which providers of digital services may use the data they collect across the ecosystem”, such as from smart home devices, for their product offerings.

For example, the report highlights “how the data collected from Google Next may relate to other Alphabet offerings, such as its internet search engine services“ through Google.

It will also consider the impact of expanded ecosystems of large digital platforms service providers on data collection and use of personal data, with consumers often compelled to accept undesirable terms of use.

“Interconnected products, like smart home devices and cloud storage solutions, can provide consumers with a seamless experience that simplifies everyday tasks, but it’s important that competition and consumers are not harmed,” Ms Cass-Gottlieb said.

The report will also seek to investigate the costs involved in switching to alternative platforms or services that can lead to “consumer lock-in”, “dark patterns that discourage consumers from switching” and other decisions that impede informed decisions.

The ACCC plans to submit the interim report to the Treasurer by September 30. It will accept submissions from consumers and businesses about their experiences with the ecosystems of digital platform services until April 5.

“Large digital platforms have become an integral part of our daily lives, they have access to enormous user data bases and personal information across their ecosystems,” Ms Cass-Gottlieb added.

“This report will assess how that data can be leveraged across products and services within an ecosystem that may prevent businesses from entering and competing.”

The ACCC has been assessing the economic competitiveness of digital platforms since December 2017, when it was tasked with considering the impacts of online search engines, social media and digital content aggregators on competition in the media and advertising services market.

It delivered its final report in July 2019, recommending new oversight for digital platforms, and since February 2020 has continued its scrutiny through a series of interim reports produced by a dedicated digital platforms branch.

The reports have probed areas like messaging services, apps, browsers and search, marketplaces, and digital advertising. The next interim report is focusing on social media, which led to recommendations for new platform regulation in September.

The next interim report, planned for release later this month, focuses on social media.

Do you know more? Contact James Riley via Email.

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