ACCC’s Plan to Tame Tech Giants

Key Points: 
  • The ACCC has released its recommendations on how Australia should deal with technology giants, like Facebook and Google, whose presence is increasingly felt by Australians.
  • The ACCC’s recommendations predominately deal with anti-competitive conduct, privacy and government oversight.
  • Although these recommendations are primarily directed at large technology companies, they will affect the rights of individuals and the rules governing small to medium businesses if ratified by Parliament.
On 10 December 2018, the Australian Competition & Consumer Commission (‘ACCC’) released its proposals on how Australia should respond to the expanding grip of technology giants, like Facebook and Google, on the lives of everyday Australians.

These recommendations include mechanisms to counteract the negative effects that digital platforms have on business to business competition, strengthen the individual’s right to privacy and increase government oversight. Some of these recommendations are summarised below.

Competition

(Acquisitions) The ACCC recommends that digital platforms be required to provide advance notice of the acquisition of Australian businesses. This recommendation is intended to assist the ACCC to undertake a thorough review of the likely competitive effects of the proposed acquisition. The absence of such reviews has enabled companies like Google to build and operate monopolies in their distinctive marketplaces, suppressing innovation and competition.

(Eliminating default bias) The ACCC recommends prohibiting mobile devices, computers and tablets from being preloaded with search browsers and engines. This is reflective of Google’s recent $AU6.85 billion fine, imposed by the European Union, for requiring Android phone manufacturers to pre-install Google’s apps on Android devices. The rationale for this recommendation is to diminish the substantial market power of Google (and other digital platforms) and stimulate competition within the search engine marketplace.

Privacy

(Use of Personal Information) The ACCC recommends that the Privacy Act be amended to:
  1. Increase transparency of digital platforms’ data practices
  2. Equip consumers with greater control over their personal information; and
  3. Increase penalties for privacy breaches.
(Civil Liability for Privacy Breaches) The ACCC recommends that businesses should attract civil liability for serious invasions of privacy. This is intended to increase the accountability of businesses for their data managing practices and compensate individuals who have suffered loss from data mismanagement.

Government Oversight

(Related Business Oversight) The ACCC recommends the establishment of a regulatory authority to monitor and investigate discriminatory conduct. This authority would target digital platforms which favour their own business interests above advertisers or their competition. This is apparent in practices such as ranking content in platforms in which they have commercial interests more highly than their competitor’s content.

(News and Journalistic Content Oversight) The ACCC recommends that the Government devise a regulatory framework to police the production and delivery of news and journalistic content in Australia. They recommended a national scheme comprising platform-neutral principles which would be enforced by a monitoring agency with investigatory powers.

(Unfair Contract Terms) The ACCC recommends that it should be illegal for digital platforms to include unfair terms in their contracts with consumers. These terms are currently voidable under Australian Consumer Law. This transition from voidable to illegal would enable the ACCC to apply for civil penalties against businesses which include these clauses in consumer contracts.

What Happens Next?

The ACCC has requested stakeholders and members of the public to provide submissions in response to its Preliminary Report [1].  These submissions will be considered by the ACCC and may be incorporated into its recommendations in its Final Report.

Please note that submissions are due by 15 February 2019 and should be submitted by email to platforminquiry@accc.gov.au.

[1] Commonwealth, Australian Competition & Consumer Commission, Digital Platforms Inquiry – Preliminary Report (2018).

Post by John Kell and Joshua Yan

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