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Australia gears up for big tech battle

US tech giants are on course for a showdown-under, after Australia's competition watchdog called for new laws to protect competition.

Nick Wood

November 28, 2023

3 Min Read
Australia

In its latest interim report into digital platforms – which focuses on smart home devices and consumer cloud storage as examples – the Australian Competition and Consumer Commission (ACCC) said that while it didn't find evidence of anti-competitive conduct by Amazon, Apple, Google, Meta and Microsoft, their collective expansion into emerging technologies and adjacent markets warrants updated regulations just to be on the safe side.

"Australians increasingly use digital platforms for work, study and play and can benefit from their wide range of interconnected products and services," noted ACCC chair Gina Cass-Gottlieb. "While the size and scale of digital platforms alone does not raise concern, there is a risk that this expansion may be driven by a desire from digital platforms to entrench or extend their market power."

Just like regulators in the US and Europe, the ACCC has identified practices like service bundling, pre-installed apps, default settings and self-preferencing as potentially problematic. It said tech giants can act as gatekeepers in the market by offering smart home products that only work with their own digital assistants.

Furthermore, when it comes to cloud storage, the watchdog thinks it's all too easy for big tech to shackle an entire household to its ecosystem by making it difficult to transfer files to alternative service providers.

"Integrated cloud storage services can be convenient for consumers, but they can also discourage consumers from purchasing new products and services outside the ecosystem," Cass-Gottlieb said. "This makes it harder for competitors who offer standalone services to compete and potentially stifles the development of innovative products."

Then there's the issue of data collection.

As has been the case for decades, big tech loves compiling rich, detailed data that it can sell to advertisers. The more touch points with the end user, the more granular and valuable the data becomes.

The ACCC is concerned that when it comes to smart home devices, it's not clear whether the data collected by the likes of Amazon, Apple and Google exceeds what is necessary to improve device functionality or product improvement.

This suggests that users are at risk of losing control over their personal data, the watchdog said.

"Consumers who use multiple products from a single digital platform may be forced to agree to unfavourable terms and conditions and/or accept unpalatable data collection practices due to a lack of suitable alternatives or because it is simply too inconvenient or costly to move out of that ecosystem," Cass-Gottlieb warned.

In order to address its concerns, the ACCC has called for "legally binding codes of conduct, applied service by service, which require certain designated digital platforms to address issues including anti-competitive self-preferencing, tying and exclusive pre-installation arrangements."

This approach "would provide flexibility to target specific conduct and protect consumers from poor competition outcomes as digital platform service providers expand their reach."

Amazon and its fellow tech titans don't need to worry about lawyering up anytime soon though. The ACCC's report is part of a broader, five-year review called the Digital Platform Services Inquiry. A final report isn't due to be submitted to the Treasury until the end of March 2025.

Plenty of time for everyone to practice their legalese.

About the Author(s)

Nick Wood

Nick is a freelancer who has covered the global telecoms industry for more than 15 years. Areas of expertise include operator strategies; M&As; and emerging technologies, among others. As a freelancer, Nick has contributed news and features for many well-known industry publications. Before that, he wrote daily news and regular features as deputy editor of Total Telecom. He has a first-class honours degree in journalism from the University of Westminster.

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