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Aussie regulator: We are struggling to keep up with Big Tech 

Peter Griffin, Editor. 13 April 2023, 1:39 pm

Australia’s competition watchdog is recommending an overhaul of merger laws across the Tasman as it cites the power of Big Tech and its digital economy business models as a threat to the traditional competitive landscape.

The Australian Competition and Consumer Commission chair Gina Cass-Gottlieb told a National Press Club audience in Canberra yesterday that “technological advances are driving rapid structural changes to markets” requiring a new regulatory approach.

“A handful of large tech companies are playing increasingly important roles in our lives, as gatekeepers over how we interact with each other and businesses, and yet in many cases, these companies face only limited competitive constraint,” Cass-Gottlieb said during her address.

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Gina Cass-Gottlieb at the National Press Club, Canberra

The ACCC recommends that Australian law changes to require companies to gain formal clearance from the regulator before pursuing any merger and acquisition plans - a process that could apply ot major digital companies active in the Australian market.

Currently, companies are free to develop their proposals for merging ahead of formally seeking approval for the merger from the ACCC. They can give the regulator a heads-up that they are working on a merger proposal, but it's an informal process and not mandatory.

Asked about Meta’s acquisition of gif creation website Giphy, Cass-Gottlieb said that under the current regime, the ACCC currently had “no capacity” to scrutinize such transactions and the potential impact on the competitive landscape in Australia because the companies concerned had no obligation to give the ACCC a heads-up.

Meta last year sold Giphy after the UK’s competition watchdog, the Competition and Markets Authority, demanded that it divest its new acquisition because it entrenched the social networking companies market power.

“A proper process, without going to court cases, will allow us to be assured that we have sufficient time to scrutinise to take action where there are likely to be competition harms and also be looking more transparent to the public, to participants interested, and also to parties themselves about the process,” Cass-Gottlieb said.

The subscription trap

Earlier this week, Cass-Gottlieb also took aim at anti-competitive practices online service providers were engaging in. She said online games, media and streaming services regularly offer free trials or cit-price subscriptions for limited periods, but make it hard to unsubscribe from them before standard pricing kicks in.

“Everyone calls it a subscription trap,” she said. “The terms and conditions say you can unsubscribe, but the practice of it is ... almost impossible or bordering on impossible to do.”

The ACCC has been increasingly proactive on the digital front, designing a scheme for Facebook and Google to reimburse media outlets for carrying their news-related content and undertaking a competition review of the digital landscape.

Its proposed changes to merger law are a step back from the tougher laws recommended by Cass-Gottlieb’s predecessor Rod Sims, which the Morrison government declined to pursue.

Our own Commerce Commission has been subdued on the digital economy and issues thrown up by the power and reach of Big Tech companies. It devoted significant resources to investigating the Sky TV-Vodafone merger proposal and the NZME-Stuff merger. The ComCom rejected both proposals.


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