‘Too much power’: Aussie media code backed by Britain’s regulators

Britain’s competition regulator has voiced support for Australia’s plans to tackle the dominance of the digital giants like Google and Facebook. Picture: AFP

UK competition regulator Andrea Coscelli has strongly backed the Australian Government’s media bargaining code, saying “the digital platforms have too much power and are under-regulated.”

Dr Coscelli was speaking to The Australian ahead of his speech in the annual Bannerman lecture.

In Australia, the Senate is expected to hand down its decision on the bargaining code on Friday.

Dr Coscelli noted that between 2008 and 2018, of the 400 acquisitions made globally by the five largest digital firms, including include Google, Facebook, Amazon and Apple, none has been blocked by competition authorities.

The UK Competition and Markets Authority is adapting to a new regime post-Brexit which means there will be some overlap in its work with the powerful EC competition policy.

Dr Coscelli praised the Australian media bargaining code saying “it is an intelligent way of doing it” but stopped short of saying the UK would copy the terms.

He also supported ACCC chief Rod Sims’ calls for legal reforms to help combat the digital behemoths.

The CMA, which has just established a digital markets unit, which like the ACCC is seeking to impose a legally binding code of conduct for the platforms and more power to force “interoperability” which means different computer devices systems can use the same systems.

Dr Coscelli also wants more power to intervene early to boost competition .

“We need to get away from the simplistic idea that regulation is usually harmful to competition. Designed well, regulation can help competition work better, and improve outcomes for consumers and society at large,” he said in his lecture .

“The largest digital platforms, it is argued, have attained unassailable positions of dominance right under our noses. The ‘web of restrictions’ is reasserting itself, this time in new guises, such as algorithmic collusion, anti-competitive self-preferencing, and acquisitions of nascent rivals. And we are struggling to address these concerns in a timely and effective way,” he said

Dr Coscelli said the key three principles of competition law - consumer welfare, caution in the face of uncertainty and competition is better than regulation - were challenged by the digital platforms.

“I think it is right we should stay focused on the consumer interest; or in other words, what they stand to gain or lose, but consumer welfare should be interpreted broadly,” he said

Dr Coscelli said “Non-price factors, such as quality and innovation, may be the primary focus of the analysis in certain cases. Similarly, in a merger between two firms in the digital space, we may well be concerned with the privacy implications or the impact on innovation. Even an issue like the security and resilience of supply chains – a concern that has intensified as a result of the pandemic – is something that could form part of our consideration, to the extent that it affects consumers over time.”

He stressed the need to amplify “the consumer voice to help entrench the legitimacy of the competition regime, and to address reasonable concerns that it is systematically biased against the consumers whose interests it purports to represent”.

“Second, at a more practical level, it can enrich our evidence base and improve our analysis,” he added .

“We now know enough, for instance, to make a compelling case that a new regulatory framework for the most powerful platforms is required to promote competition in a number of digital markets,” Dr Coscelli said

Some lawyers argue the case is made but competition authorities like the ACCC and CMA have failed to act, citing the recent decision by Google to proceed with its Fitbit merger despite publicly stated ACCC objections.

Dr Coscelli argued pro-competitive regulatory intervention (such as interoperability or non-discrimination in rankings) is justified, and indeed necessary, if we are to sustain innovation and growth, and avoid consumer harm, in this increasingly important sector.