Senate committee proposes new Big Tech regulatory body


Justin Hendry
Administrator

A digital platforms coordination body should be created by the federal government to address competition concerns presented by Big Tech companies like Google, Meta, Microsoft, Apple and Amazon, a Senate committee has recommended.

The finding is contained in a Senate inquiry’s report into the influence of international digital platforms, which also urged the government to take up a recommendation in the Privacy Act Review to create a ‘right of data erasure’.

The report, released late on Thursday night, made the recommendations after 14 months of hearings in which it heard that the “current regulatory system is not working effectively”, with the regulation of digital platforms split across various agencies.

“The committee found that the current legislative and regulatory framework is not sufficient to ensure positive outcomes for consumers and competition. In short, it is fragmented,” the report said.

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Despite the existence of regulators like the Australian Competition and Consumer Commission, the committee, which is chaired by Liberal Senator Andrew Bragg and has a Liberal majority, said that a “new regulatory regime could address fragmentation and bolster regulatory efficacy”.

“Evidence to the committee also highlighted the need for better coordination between regulatory bodies and policymakers. Improved coordination would streamline legislation and regulatory efforts,” the report said.

“Accordingly, the committee recommends a new coordination body be established, which does not alter or acquire the day-to-day functions of the four main Digital Platform Regulators’ Forum (DDP-REG) agencies but coordinates collaboration efforts, common responsibilities and tasks.”

Government senators, however, said that it is “unclear what a coordination body would add when there already exists cross-government coordination”.

“This coordination is already happening, and it complements the whole of government approach the government is taking while recognising the requirements for the regulators to maintain their independence and pursue their respective responsibilities and priorities,” the senators said.

The committee also said that it was concerned by practices like the bundling of payment services and products by large digital platforms, and recommended that the government introduce legislation to prevent such anti-competitive practices.

“The committee heard evidence that the dominant market power of Big Tech has allowed these firms to engage in anticompetitive behaviours and exploit power imbalances to the detriment of small businesses and consumers,” the committee said.

Some submissions raised concerns that app store providers “tie the use of app store services to the use of their in-app payment (IAP) services”, an issue at the heart of Epic Game’s case against Apple in Australia and the United States.

“The committee is concerned that the tying of IAPs creates a barrier to entry for competitors and limits the choices available to consumers. Further, the committee believes there is a lack of transparency in how commission fees are determined, and how app stores use the IAP data they collect,” the report said.

During the inquiry, multiple submissions also called for regulations to tackle “anti-competitive self-preferencing by gatekeeper companies”, citing the United Kingdom’s pro-competition regime for digital markets.

“This regime will include measures to address anti-competitive self-preferencing by requiring digital platforms to not influence competitive processes or outcomes in a way that unduly self-preferences a platform’s own services over that of its rivals,” the committee said.

Other recommendations include the government requiring mandatory disclosure by large digital platform of self-preferencing conduct and the creation of a tribunal for small disputes with digital platforms.

The committee also backed the Privacy Act Review proposal to create a right of data erasure, which New Zealand’s privacy commissioner earlier this week argued would have limited the extent of the recent Latitude Financial data breach.

“Submissions highlighted that individuals have limited rights when it comes to how their data is used. A right to erase personal data would give individuals more control over their own information when engaging with digital platforms,” the report said.

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