ACCC proposes major antitrust reforms targeting big tech dominance

Australia’s competition regulator has proposed a slew of legislative measures addressing competition and consumer welfare issues found within digital platforms as part of its big tech probe that commenced five years ago.

The Australian Competition and Consumer Commission’s (ACCC) proposed measures, outlined in a discussion paper [PDF], are aimed at providing new tools to cover anti-competitive conduct, barriers to entry, bargaining imbalances, and insufficient consumer and business user protections.

Outgoing ACCC chair Rod Sims said last week the core proposals would take the form of a new code of conduct, comprised of upfront rules, that seek to “prevent the worst abuses of dominance and protect consumers”.

In the discussion paper, the regulator said the new measures are needed as current tools under Australia’s consumer laws may not be sufficient alone for addressing harms identified within digital platforms.

“In relation to the CCA (Competition and Consumer Act), the ACCC considers that existing provisions alone may not be sufficient to address the harms to consumers and competition arising from the significant and entrenched market power of the large digital platforms” the regulator said.

“In relation to the ACL (Australian Consumer Law), the ACCC has identified specific types of conduct prevalent in the supply of digital platform services that are harmful to consumers but not expressly prohibited under Australian law.”

The proposed rules for preventing anti-competitive behaviour include a ban on self-preferencing conduct that prevents competition such as Google favouring its own Search services, obligations to treat competitors fairly or in a non-discriminatory manner, and rules requiring that digital platforms provide access to key inputs on fair and non-discriminatory grounds.

The ACCC’s upfront rules for addressing data advantages of incumbent digital platforms, meanwhile, are focused primarily on data portability measures. The enforcement of data portability rules would see platforms be required to action consumers’ requests to export their data from one service to another without excessive friction. It could also require that digital platforms do not block tools developed to help consumers export their data.

Data portability could address the competitive advantage of large digital platforms by facilitating consumers switching between some competing digital platform services, the ACCC said.

“By lowering switching costs for consumers, data portability may lessen lock-in effects of some digital platform services and promote competition by reducing barriers to entry and expansion,” the watchdog explained.

The ACCC also recommended that measures available for addressing an ad tech provider’s data advantage should include data separation measures, such as preventing an ad tech provider from using data it has collected from its consumer-facing services to provide ad tech services on third-party sites and apps.

On the consumer protection front, the ACCC wants digital platforms to have a legal obligation to notify or provide redress to users who have been exposed to identified harmful content, implement systems and processes that proactively prevent the distribution of online scams and malicious apps to users, and report regularly to relevant regulators and law enforcement agencies.

The consumer watchdog also wants the ACL to be amended to prohibit certain trading practices that encourage the use of dark patterns. Dark patterns are user interfaces that take advantage of certain psychological or behavioural biases to manipulate users into performing certain actions.

Specific dark pattern practices that the ACCC wants to see banned include giving unequal visual prominence to options that benefit the platform when asking a consumer to give consent or when consumers are seeking to change a default setting, repeatedly prompting a user to change a setting to one that would benefit the platform after they have already made a choice, and making the process for cancelling a service much harder than signing up for the service.

Australia has not been alone in progressing talks on increased regulatory scrutiny on big tech, with the competition regulators in Japan, the UK, EU, and US all conducting their own respective antitrust investigations into large digital platforms. 

In acknowledging the global enforcement efforts, the ACCC said more regulatory measures are still needed as “there has not been a noticeable change in market dynamics and similar conduct continues to emerge across these and related digital platform markets”.

The ACCC also slid in another call for merger law reform in the discussion paper, with the regulator envisaging new tailored merger rules specifically for digital platforms that meet pre-defined criteria linked to their market power and strategic position.

Since last year, Sims has repeatedly said effective scrutiny of acquisitions by large technology firms is critical for protecting business users and consumers.

“The reason we are proposing change is not because we are worried about losing court cases; it is because we have serious concerns about the level of competition in our economy and our ability under the current law to prevent further consolidation via anti-competitive acquisitions,” Sims said at the time.

The ACCC also said the onus of proof for proving a merger is anti-competitive should be reversed so digital platforms are the ones that are required to show a merger is fair. Currently, the ACCC carries the onus of proof for establishing that a particular merger or acquisition is anti-competitive.

Lastly, the ACCC also proposed that digital platforms should be subject to minimum internal dispute resolution standards and that an independent ombudsman scheme should be established to resolve complaints involving digital platforms.

“The ACCC notes that improved dispute resolution processes may be a further way to provide digital platform users with the means to obtain redress for the harms caused by malicious or exploitative apps and content,” the regulator said in the discussion paper.

The ACCC will be seeking public consultation on these proposed regulatory measures until April 1. 

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