The ACCC may seek extra powers to deal with anti-competitive behaviour among tech firms

ACCC chair Rod Sims says he is considering asking the government for extra powers to help tackle the dominance of tech giants such as Google, Apple and Facebook.

Chair of the Australian Competition and Consumer Commission Rod Sims says it might need further powers and changes to the law for the tech domain. Picture: Sean Davey.

Competition watchdog chair Rod Sims has delivered a warning the big tech sector is in his crosshairs, and more regulatory powers could be sought to enforce existing competition rules in the face of any anti-competitive behaviour.

Advice to the Treasurer on these extra powers against search technology and digital platforms led by Google, Apple and Facebook could be contained in a report sent to the federal government by next September.

Mr Sims said many other jurisdictions recently spanning Europe, Britain, the US and Asia had passed new legislation that focused on digital firms — which up until now had been able to skirt existing anti-trust laws that had failed to keep pace with the digital, tech and data revolution.

In a speech to the Annual Competition Law & Economics Workshop, hosted by UniSA and the Australian Competition Consumer Commission, Mr Sims did not spell out the type new powers he was seeking, or what changes to the Competition and Consumer Act would be required, to rein in monopoly and duopoly activities. But he said that he was considering following moves by other competition regulators.

“Although the ACCC’s existing powers under the Competition and Consumer Act 2010 allow us to take some enforcement action against digital platforms, we are considering whether upfront regulation may be needed in addition to enforcement under the existing CCA provisions to address the competition and consumer concerns our digital platforms inquiries have identified,” Mr Sims said in his speech.

“Sector-specific regulation is not without precedent. Australia has introduced industry specific legislation before where it is needed rather than rely solely on enforcement of the economy wide competition law provisions. For example, the ACCC already administers industry-specific competition and access functions in relation to the telecommunications sector.”

Mr Sims said as part of the five-year digital platform services inquiry, the ACCC would consider whether there was a potential need for wider sector-specific regulation to address the competition and consumer concerns in digital platform markets.

“If such regulation is found to be necessary, we will also consider how this regulation should be designed to address the harms in a proportionate yet effective way,” he said.

“Our advice will be provided in a report to the Treasurer in September 2022. Importantly, we will seek industry views on this crucial question, and work closely with the Commonwealth Treasury.

“The key questions we face are how effectively is our competition law working to ensure our market economy is working for all Australians, and is there a need for significant change.”

It’s not the first time the ACCC and Mr Sims have singled out the tech sector for special mention or action. Only last month the ACCC warned that Google’s dominance in advertising tech harmed business and consumers, while in April it warned that the dominance of Apple and Google’s app stores were impacting competition and consumers.

In December 2020 the regulator alleged that Facebook misled consumers when promoting an app to protect users data, and initiated proceedings in the federal court against the social media giant.

In his speech to the conference, Mr Sims said in the ACCC’s digital platforms work, across a digital platforms inquiry, several interim reports under its longer term digital platform services inquiry and the ad tech inquiry, it had observed some common competition issues.

“Digital markets often feature one or two dominant firms with significant market power, which allows them to impede competition and have a huge influence on the consumers and businesses reliant on their services. In ad-tech and search, this is Google; in app marketplaces, this is Apple and Google; in social media, this is Facebook.

“We have found that many of these firms are vertically integrated and there is evidence of considerable anti-competitive self-preferencing where firms favour their own interests over downstream rivals in a number of different ways depending on the market,” Mr Sims said.

“This may include pre-installation and default first-party services, using algorithms to favour first-party services or using information collected as a service provider to benefit first-party services over rival services.

“We have also observed the important role of data, and how access to large amounts of user data can help entrench a strong market position by creating significant barriers to entry and expansion,” he said.