Australia proposing new laws to curb big tech market power

An Apple Store in Sydney Australia

Apple and Google have both previously protested against the Australian Competition & Consumer Commission (ACCC) antitrust investigations, and most recently Google was fined $40 million by the regulator for location tracking. Now the ACCC has published what it calls an interim report, and which calls for extensive regulatory reform.

"Our analysis has identified significant consumer and competition harms across a range of digital platform services," writes the ACCC in the full report. "These include financial losses to scams and unresolved disputes, reduced choice and an inability to make informed choices, reduced innovation and quality, and higher (monetary and non-monetary) prices."

"The conduct causing these harms is widespread, entrenched, and systemic," it continues. "The ACCC has observed high levels of concentration and entrenched market power in relation to app store (Google and Apple), search (Google), ad tech (Google) and social media (Meta) services."

Australia's regulator also notes that these "large and influential companies" have "significant financial resources."

"For example," it says, "as at April 2022, the market values of both Apple and Alphabet (Google's parent company) each exceeded Australia's total annual gross domestic product in 2021."

The ACCC argues that the financing of Big Tech companies, and the economies of scale they benefit from, means that this "can raise barriers to entry and put smaller rivals at a cost disadvantage."

Building on existing laws

Australia does already have anti-competition regulation in the form of the Competition and Consumer Act 2010 (CCA). However, the new report claims that even when Big Tech's actions come under this law, it is now insufficient.

"While many of the types of conduct... could potentially breach the competition provisions of the CCA," writes the ACCC, "it could take many years to progress cases against the full range of conduct observed."

"In that time, harm to competition would continue, with potentially significant detrimental outcomes," continues the report. "The resulting economic losses to Australians in terms of choice, innovation, privacy and potentially, higher prices (for example, for digital advertising) would be substantial."

Targeting Apple, Google, and Meta

While the ACCC's report specifically names Apple, Google, and Meta, it says that Meta will be considered under a separate social media report in 2023. This current report avoids tying its recommendations down to these companies, saying instead that it would be applied to what it calls Designated Digital Platforms.

These are companies "that meet clear criteria relevant to their incentive and ability to harm competition." In other words, the Australia authority wants to reserve the ability to declare which firms any future laws apply to.

Nonetheless, it does single out actions it says show Apple and Google allegedly abusing their position. It cites three main examples.

• Apple ranking its own apps above third-party ones in the App Store
• Apple and Google using data collected from their App Stores
• Google promoting its own services in search results

Proposed new regulations

The ACCC recommends many measures, including:

• Strengthening of unfair contract terms laws
• New and expanded economy-wide consumer measures
• Processes to prevent and remove scams, fake reviews
• Public reporting
• Independent external ombuds scheme
• Prohibiting the exclusive installation of a firm's own apps
• Making "frustrating consumer switching" to other services illegal

"These regulatory arrangements should be developed through close consultation with relevant Australian Government departments and agencies," continues the report's recommendations, "given the overlapping jurisdiction of multiple agencies in respect of digital platforms."