Australian Antitrust Watchdog Takes Aim at Big Tech

February 2020

Demonstrating that antitrust enforcers have “Big Tech” in their sights in 2020, Australia has emerged as an unexpected forerunner in this battle. In 2019, the Australian Competition and Consumer Commission (“ACCC”) issued a report containing proposals for broad-sweeping reforms designed to address the dominance of companies like Facebook and Google in media and advertising markets. The Australian government has now responded, shining a light on what changes 2020 may bring for both Australia and beyond.

Although Australia is a relatively small player in the international legal world, the impact of the report should not be underestimated. The rest of the world now finds itself looking to this down-under jurisdiction, because whatever reforms are enacted in Australia will inform regulatory policy and enforcement across the globe, including the high-profile investigations here in the U.S. by the Federal Trade Commission and Department of Justice. This article outlines the reforms that the Australian government has agreed to adopt and highlights the possible ramifications for antitrust enforcement in the U.S. and internationally.

The ACCC Digital Platforms Inquiry

On July 26, 2019, the ACCC concluded its digital platforms inquiry and released a final report containing 23 proposals for reform. This was the first in-depth analysis of its kind in the world. The scope was large: The ACCC conducted a detailed investigation under competition, consumer protection, unfair trading, and privacy and data protection laws to produce a 619-page report. The commission received 180 written submissions, issued 60 statutory notices compelling the production of documents, and held countless meetings with interested parties, members of the public, and international regulatory authorities.

On December 16, the Australian government published its eagerly awaited response to the report, committing itself to a number of the ACCC’s recommendations. The key initiatives that the government has indicated it will implement at this stage include:

  1. Establishing a new Digital Platforms Branch within the ACCC to investigate and report on the conduct of digital platforms and undertake enforcement actions. It will also have the power to launch further inquiries, with one already in the pipeline: online advertising and ad-tech services and supply chain, with a particular focus on self-preferencing and bundling/tying behavior.
  2. Reforming Australia’s privacy laws to increase penalties and introduce a digital platforms privacy code, including regulating how platforms use personal information. This is a step toward greater alignment with the
  3. A further review of Australia’s merger laws to determine whether to expressly require the following factors be taken into account when assessing proposed acquisitions: (a) the likelihood of the acquisition resulting in the removal from the market of a potential competitor; and (b) the nature and significance of the assets, including data and technology, being acquired.

Impact on the U.S. and beyond

Given the trend of heightened scrutiny being given to Big Tech by competition regulators in many jurisdictions, the proposals will be of particular interest to antitrust lawyers in the U.S. and around the world.

For one thing, because of the global nature of the technology industry, Big Tech companies often choose to adopt across multiple jurisdictions the strictest measures required by a single regulator rather than tailoring their platforms to the requirements of each country. Facebook and Google may therefore decide to implement across the world any changes required by Australia.

Further, although the report focused on “digital search engines, social media platforms and other digital content aggregation platforms … on competition in media and advertising services markets” — essentially Google and Facebook — it sets a framework for change that could equally be applied to similar platforms.

Trends in antitrust enforcement of Big Tech

The ACCC report portends a new era of regulatory willingness to go after international digital platforms and underscores the growing tension between competition enforcers and Big Tech. Silicon Valley companies have a well-founded fear that reforms accepted and enacted in Australia will shape the debate in other jurisdictions, especially the U.S. Notably, there are a large number of reviews currently underway in various jurisdictions in the U.S. as well as internationally, where regulatory officials could take into account how Australia has decided to act and impose similar requirements here.

Simultaneously, lawmakers and commentators in the U.S. are urging regulators to get more aggressive. Whatever happens in Australia will likely become an important blueprint for reform in the U.S., one suggesting that more investigations and stricter enforcement are on the way, especially in the areas of data collection, online advertising, and horizontal and vertical mergers and acquisitions. The fact that Australia is implementing reforms in these areas makes them areas of interest for those practicing in the U.S. also.

Excerpted in part and updated from Antitrust Takeaways For Tech From New Australian Report, October 22, 2019, on Law360, available at https://www.law360.com/articles/1211853/antitrust-takeaways-for-tech-from-new-australian-report.
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