Brad Smith says Microsoft welcomes Australia’s tussle with Big Tech

The company’s global president says Australia’s competition tsar Rod Sims is on the right track when it comes to tackling the likes of Google and Facebook.

Brad Smith, Microsoft’s global president, welcomes the ACCC’s grappling with Big Tech issues. Picture: Britta Campion

Microsoft global president Brad Smith has weighed in on the Australian competition watchdog’s tussles with Big Tech, declaring that tech companies will need to live with greater scrutiny in the future, particularly in the Australian market.

Speaking at a wide-ranging roundtable with journalists on Thursday, Mr Smith – who was a strident supporter of the ACCC’s recent news media bargaining code legislation – said that Microsoft takes a far different approach to regulation now compared to the Microsoft of the 1990s and early 2000s, which was found to have breached antitrust law in multiple jurisdictions.

He said tech companies including Microsoft need to work cooperatively with regulators including the ACCC, and not against them.

“We live in a world where we need to expect that larger tech companies will be subject to greater scrutiny. The ACCC in Australia, which is frankly one of the most sophisticated regulators of these issues in the world, has tended to focus on market share, market power, and potential abuse in a specific market.

“Many acquisitions in technology serve customers and consumers well, and to take the issue of the day, I think if Microsoft has the opportunity to add a great video editor to its services … If we can add a strong company that happens to be in Brisbane, we can move faster, bring those services to people around the world more quickly, and we will always listen to and respect the ultimate decision of the regulators.

“I think the important thing is that we remain cognisant of steering clear of the kinds of issues that in fact drove these issues in our past, and in other people’s present.”

On the news media bargaining code, Mr Smith said he had discussed the issue in-depth with Australia’s Prime Minister Scott Morrison, a conversation that had highlighted the increasingly globally co-operative nature of tech regulation.

Other jurisdictions including Canada and France have followed Australia’s lead in attempting to force tech giants like Facebook and Google to pay for news.

“When [Microsoft CEO] Satya Nadella and I talked to Prime Minister Morrison in Australia, back in January, about the issues involving news and competition, one of the things he said to us was that he had started his day by talking to President Macron from France about this same issue,” Mr Smith said. “And I think that just reflects on the level of interaction you see in the world today. And you know, frankly, one of the things that reflects is the role of the technology we’re using here, even at a time when people cannot travel.”

ACCC chairman Rod Sims. Picture: Jonathan Ng

The ACCC is also eyeing potential regulatory changes to Apple and Google’s app stores, after finding in a recent report that those tech giants have an effective monopoly, therefore stifling competition.

South Korea last week passed legislation forcing Apple and Google to open up their app stores to other payment methods, and Mr Smith said the app stores’ opening up is “expanding around the world and is likely irreversible”.

“That trend is to turn to law and regulation to constrain what is now broadly regarded as excessive and inappropriate use of app stores to impact competition in a negative way,” he said.

“I think what we’re going to see emerge is a new legal and regulatory structure, it may take another year or two to reach fruition, but I think it will be a new legal and regulatory structure that will protect privacy and security and recognise that that’s important and legitimate. But will address the complete broader competition concerns.

“You saw it in Japan, you see it in Korea, and you’re gonna see it, I think, especially as it plays out with respect to gaming, because that’s where a lot of the rules reach the furthest. And that’s where the economic impact in some ways is the broadest. That just seems to be where the world is going.”

Originally published as Brad Smith says Microsoft welcomes Australia’s tussle with Big Tech