Competition tsar Rod Sims says the regulator is considering strengthening its “toolkit” to go after tech giants, flagging new regulatory frameworks and merger law to keep up with the biggest digital platform companies.
In a webinar speech to the Global Competition Review on Thursday, Mr Sims said the number of regulator-led enforcements against platform giants around the world was becoming “difficult to count” and suggested more proactive action will be necessary.
One area identified by Mr Sims for a new approach is app stores. In April, the ACCC released a report on the app store practices of Google and Apple, which together account for nearly the entire local market.
The report was a warning to the tech giants to clean up the stores — which are under scrutiny for high fees and opaque practices — or face regulation. It identified potential measures for Google and Apple to improve rather than formal recommendations.
But three months later, Mr Sims said it seems unlikely Google or Apple will follow the regulator’s suggestions on their own and “up front rules and regulation may be needed”.
The Australian Competition and Consumer Commission currently has several inquiries underway and active court cases against Google and Facebook. It has also established a dedicated digital platforms inquiry to scrutinise the tech giants until at least 2025.
The platforms unit has so far developed codes of conduct for publisher and platform negotiations and handling disinformation, as well as issuing a detailed warning to app store market leaders on how to improve.
The regulator has also won a legal battle against Google over it misleading consumers about data collection.
It makes Australia an “early mover” in some regards, Mr Sims said, but more fundamental change is needed to keep pace with the fast-moving platforms.
“…We are considering whether our toolkit needs strengthening,” he said.
“Around the world, there is growing recognition among relevant authorities that existing regulatory frameworks and merger law have not held up well to the challenges posed by digital markets.”
He told global counterparts that existing Australian competition and merger law is “often inadequate” to address concerns associated with multinational digital platforms like Google, Apple and Facebook.
“This is because of the necessary narrowness of cases, and the length of time taken to investigate and enforce competition law, combined with the fast-moving nature of these businesses.
“This has led to growing recognition of the need to regulate digital platforms to prevent anti-competitive or harmful conduct before it arises…”
Merger law also needs a rethink, according to the competition watchdog, who pointed to 431 acquisitions by Google, Facebook, Microsoft, Amazon and Apple in the decade to 2019, together worth more than US$155 billion.
The acquisitions, often of competing companies, help platform giants to entrench and extend their market power.
“These acquisitions have visibly contributed to the substantial market power that the leading digital platforms hold and there is growing recognition by competition agencies and policymakers that scrutiny of the potential competitive impact of such acquisitions needs to greatly intensify,” Mr Sims said.
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