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ACCC fights for small business as big tech battle heats up


“I think this is where there could be a bit of law reform coming out of this because … small businesses fit under consumer law, and when a small business is being treated absolutely dreadfully, our laws aren’t adequate to deal with it.

“Many people see it as a competition issue, but it doesn’t actually substantially lessen competition in the market, it just treats one company very badly.”

Google resistance

While Facebook has kept its thoughts on the code of conduct to itself, Google has come out swinging, with local boss Melanie Silva complaining on Friday that it was not a “forward thinking” plan.

Google has increasingly been in the ACCC’s crosshairs. The watchdog announced last month that it would take Google to court over what it called “deception by design” in its user privacy policies.

Ms Silva said last Friday: “The government’s heavy-handed intervention threatens to impede Australia’s digital economy and impacts the services we can deliver to Australians.”

Technology industry heavyweights, including Atlassian co-founder Mike Cannon-Brookes, weighed in on Twitter to question the logic of tech platforms being made to pay for distributing others’ content.

Mr Sims, however, said Google’s reaction was the same as any incumbent, dominant service provider, drawing a parallel with the actions of the Port of Newcastle hiking prices for access to coal companies.

“I haven’t had a chance to speak with Google since Friday yet, but it is often the response from companies that have got a lot of market power that they don’t like any regulation to try and even up that playing field,” he said.

“A couple of years ago [Port of Newcastle] unilaterally pushed up the port access fees by about 50 per cent without consulting any of the coal companies, and when the ACCC suggested regulating them they also insisted it should be left to commercial negotiations.

“My reaction is that you can’t have commercial negotiations when you’ve got a one-sided bargaining position.”

Global attention

Mr Sims has made it a mission to insert Australia into the global discussion about the future of big tech. The lengthy digital platform inquiry that led to the code of conduct achieved plenty of international attention.

He said he had been able to take a prominent stand because the ACCC was a relatively broad regulator in comparison to other regions that keep consumer, antitrust and infrastructure issues separate.

“We’re probably instituting proceedings or taking some form of enforcement action once a week, and we do that with all types of companies, like energy providers, and you ought to talk to Telstra and Optus because they think they’re over represented in our sights,” Mr Sims said.

“Then there was a time when the supermarkets thought we were doing nothing else but focusing on them. Now it happens that these tech issues are a big part of the economy. So I think we’re going to keep devoting our time to them as they affect small businesses, consumers and important areas like the future of journalism.”

Jason Kint, an influential US-based expert who is the CEO of Digital Content Next, a trade group representing digital publishers, said the ACCC’s work on big tech was resonating loudly overseas.

ACCC changing others’ thinking

Having been impressed by the detailed questioning of the tech CEOs in the Congress hearing from some senators last week, Mr Kint said US legislators were clearly paying great attention to the pioneering work being conducted internationally in the UK, EU and Australia.

“Frankly, beyond this analysis being multiparty, it’s the global nature which is so exciting and inspiring. In particular, the ACCC’s work has absolutely broken into the thinking here, particularly by making it very clear how the two companies maintain their dominance and that their traffic distribution is not a part of their benefits seeing that it’s derived from monopoly power,” he said.

“People now laugh and look the other way when Google or Facebook suggest they drive hundreds of millions of dollars in clicks to news publishers per year. Instead they now look at the Nine chairman [Peter Costello’s] statement and nod their heads, and say ‘Hell yeah, our expensive journalism is collectively worth 10 per cent of Google and Facebook’s revenue.”

In May, Nine chairman and former federal treasurer Peter Costello said the mandatory code of conduct on Facebook and Google should force the technology giants to pay about $600 million a year, or 10 per cent of the revenue they earn from Australia, into a fund distributed between local media companies. Nine owns the Financial Review.

Mr Kint said he believed that in recent years US antitrust regulators had allowed themselves to be cornered into a requirement that consumer price be central to competition analysis. This often meant that if consumers were not seeing increased prices, then all was deemed OK in terms of tech platforms’ conduct.

“Regulators and law makers are now beginning to understand the necessity of more broadly evaluating the cost of the consumer experience, particularly the customer’s data, as major factors in competition analysis,” he said.

Unlockd founder Matt Berriman felt the power of Google’s market dominance when his company was effectively killed by the tech giant’s ban on his app. Arsineh Houspian

“When this data is used by companies’ operating platforms in order to self-preference or provide distinct advantages against other companies who must also compete against them on their platforms, the market failure is fairly obvious. We heard significant evidence, later released in documents, of this behaviour during last Wednesday’s hearing.”

In antitrust matters, the case of former high-flying Australian advertising tech start-up Unlockd, which fell apart after Google suddenly banned its apps from its platforms, has previously been taken up by the regulator.

Mr Sims said the ACCC was still pursuing Unlockd’s case, but that it had been slowed down by COVID-19 restrictions.

Unlockd’s founder and former CEO Matt Berriman told the Financial Review he intended to pursue compensation for Unlockd through the courts, but that he suspected changes to the bigger global picture would be shaped by political expediency around elections, rather than competition policy.

A significant part of last week’s Congress hearings was taken up by Republicans angling for changes related to perceived bias against conservative viewpoints, for example.

Mr Berriman said regulatory frameworks had failed to keep pace with changes in the tech industry globally, meaning forceful separations of tech giants looked necessary.

“Out of respect for [former Unlockd] shareholders, I’ll continue to fight on their behalf as long as needed. They deserve the value Google illegally destroyed,” Mr Berriman said.

“Regarding the break-up of companies, I think the genie is out of the bottle in big tech’s case, as regulators missed the market shift a long time ago.

“It’s actually the acquisitions where the step change has driven monopolies. How different does Facebook look without Instagram and WhatsApp? Google without Android, DoubleClick/Admob and YouTube?”

Mr Berriman said he was particularly interested to see the issue of the tech giants’ stewardship of their own ecosystems raised in the US Congress hearing last week.

Apple was criticised for forcing companies to pay excessive fees in its app stores, Google was pegged for funnelling advertising dollars towards its own properties, and Amazon’s Jeff Bezos had little convincing to say in response to questions about whether the company’s Amazon Web Services division ripped off apps created and distributed by other companies through its platforms.

“Any tech start-up now faces this challenge of whether to build organically or rent distribution to try and grow faster,” Mr Berriman said.

“By renting distribution from Amazon, Facebook, Google or Apple, you are at their mercy. History, and my Unlockd scars, tell us that antitrust and competition laws don’t currently protect businesses like they should.”



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