The former chair of the Australian Competition and Consumer Commission Rod Sims has used a speaking engagement in Canberra to re-emphasise the need to reign in the power of Big Tech firms.
Speaking to InnovationAus.com Mr Sims said its not that he dislikes particular companies, but is simply pointing out that Big Tech firms have “tremendous market power and they do engage in anti-competitive activity. I mean those are facts.”
Further, he suggested that Big Tech companies may find the process of dealing with regulatory bodies difficult as “they have in many ways innovated to positions of market power and behaviour that was once okay, [but] becomes not okay when you become very big and dominant”.
Mr Sims was speaking at the launch of a report by the ANU Tech Policy and Design Centre last Thursday, which detailed a new model of tech regulation. In particular, he emphasised that Big Tech companies caused issues in three areas: data, market power, and being a gatekeeper for many business enterprises.
Later in the conversation, noting that the business models of Facebook and Google are data collection and advertising, he said that “we don’t have a free internet anymore. We’ve got a data driven advertising model, and we’ve got to work out how to deal with that”. He also bemoaned the lack of app store marketplace competition for smartphones.
“The other problem we’ve also got [is] the gatekeeper role they have – in terms of how society functions – is just getting bigger and bigger. If we don’t address that, you get your backlashes. If you want to have an app, and you want it available on a mobile phone you’ve got two places to go. If you want to charge people money, those two places force you to pay through Apple Pay or Google Pay.
“[The ACCC] is focused on particular companies quite a lot because those companies have got enormous market power and close to a monopoly. They do get involved in bundling activity, self-preferencing activity, rent extraction activity, and a massive number of acquisitions,” Mr Sims said.
“The competition issues and the consumer issues generated by that group of companies is just enormous. But that’s an issue in itself. That actually doesn’t apply to all the other tech companies, because they don’t have market power.
“When people talk about Big Tech, many people in this room might say its over done, I don’t think it’s over done. We’ve got real problems we need to address and if we don’t address them it will have a negative effect on technology in general.”
Microsoft director of corporate affairs Belinda Dennett, who also sat on the panel, said that Big Tech firms wanted regulatory certainty.
“Tech regulation is incredibly important and it’s important right now because we have a huge amount of innovation happening. I think there are some who have painted the industry as anti-regulation, and I don’t believe that is true,” Ms Dennett said.
“Most tech companies want certainty, they want regulatory certainty. Regulation is really important. but it’s making sure … that we get the balance right, that we’re not stifling new innovation, we’re not stifling the way these products and services can work. But at the same time, we are dealing with genuine harms and issues that have arisen because of the use of technology.”
She also challenged Mr Sims’ focus on Big Tech companies, arguing that we should have a more holistic approach that encourages competition across the tech sector.
“Ten years ago, there was a discussion about competition in research that my company was part of, and I do remember, the ACCC said there’s nothing to worry about here, this is all fine. Tech companies can grow very, very quickly, so I think if we focus only on what we say the big problem right now is, I actually think that’s part of the problem that we’re not setting that thinking more holistically,” Ms Denett said.
“The challenge is often, if you make the regulation so high, you actually entrench the dominant players. It makes it harder for the younger players to come up. Sometimes I think we’re so focused on fixing this big evil problem that we see, we’re actually correcting the wrong problem. As a company that did have a lot of antitrust regulation, Microsoft has more competition now than it ever had, so the rise of new players actually plays a good role in that.”
In response, Mr Sims wanted to draw the distinction between enforcing the law as it is, and regulation.
“Something we’ve got to think about is to what extent enforcing the laws be that privacy laws, the safety rules, the competition laws, the consumer laws, is that regulation?” Mr Sims asked.
“Certainly the competition consumer laws have general application, they’re written for every sector, it just so happens that there’s a lot of issues in the tech sector. Whether that’s regulation or enforcement is just something to think about.”
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