Australian, European regulators unite against Big Tech

Australia’s competition tsar Rod Sims will urge the federal government to amend competition laws as part of a tech crackdown.

ACCC chairman Rod Sims says unrestrained mergers in the technology sector are damaging competition. Picture: Jonathan Ng

Australian competition tsar Rod Sims will urge the federal government to amend competition laws to make it easier to block mergers and acquisitions, particularly by Big Tech, with the ACCC joining regulators in Europe to issue a rare joint statement about the issue.

The ACCC joined its counterparts in Britain and Germany to issue a warning about the dominance of the world’s tech giants, warning that COVID-19 was no reason to allow mergers that should otherwise be blocked.

“Competition can only be maintained by ensuring anticompetitive mergers do not happen. This is even more so in a fast-developing digital world impacted by the coronavirus pandemic,” the statement reads.

“We believe that in the world today there is a real need for strong merger enforcement from competition agencies globally to ensure that high concentration levels do not become the accepted norm, and to maintain and promote competition for the benefit of consumers.”

The three regulators said they’d be increasingly sceptical of tie-ups, and that law reform was needed to make it easier to block mergers.

Mr Sims said in an interview that digital platforms had made 400 transactions in recent years, and none had been blocked. He said the ACCC had not won a merger case in courts in more than 20 years.

“We’ve got a problem here,” he said. “When you think of the fact that Google bought out Android, YouTube, DoubleClick, and obviously we’re all aware of Facebook, Instagram and WhatsApp, and not one of them is being blocked.

“The onus is on competition agencies to prove again and again that there’s going to be a problem. And we’re saying look, sometimes it’s just uncertain, and if it’s uncertain then bias to competition. Don’t bias to the merger. If you bias to the merger, rather than the competition, it damages the economy.”

The ACCC has been particularly aggressive in trying to rein in Big Tech, with its news media bargaining code this year and active investigations into Australia’s ad tech and app store markets.

Bundeskartellamt president Andreas Mundt said in a statement that “effective merger control is the most powerful instrument we have to prevent too much market power falling into the hands of only a few companies”.

The German regulator has been a strident critic of Big Tech, launching an investigation into Amazon’s market power last year.

“We see particularly strong market concentration in the digital economy. Further, takeovers and mergers can cause tipping in the market or create ecosystems which are almost incontestable for competitors,” he said.

“Stringent merger control is therefore indispensable. Where possible, imminent competition problems can be solved by imposing conditions. In this case structural remedies are clearly preferable since they permanently safeguard the competitive framework ... under German merger control, it is not possible to impose conditions that subject the behaviour of (businesses) to continued control.

“Abuse proceedings are difficult ... when it comes to Big Tech, and are merely aimed at a company’s specific conduct. If we do not rigorously apply merger control and prohibit anti-competitive mergers, the post-merger road that we subsequently have to take is a very difficult one.”