Australian Law Proposes Fines for Big Tech to Boost Digital Competition

Australia introduced a bill that would penalize multinational tech firms up to A$50 million ($33 million) for stifling competition and preventing customers from moving between services.

According to a regulation that Australia has proposed, multinational IT companies that stifle competition and prohibit customers from transferring between services might face fines of up to $50 million.

Big Tech’s power has been addressed by the centre-left Labour government, and this week, a law prohibiting children under 16 from using social media was passed by parliament.

According to Assistant Treasurer Stephen Jones, the proposed bill would give Australia’s competition regulator the authority to monitor compliance, look into online anti-competitive behaviour, and impose fines on businesses.

“The digital economy challenges our current legal framework,” Jones said at the McKell Institute in Sydney, which conducts research on public policy.

“Dominant platforms have the ability to implement deceptive strategies to force customers to use specific items, raise prices, and limit their options. Outside of the established players, innovation becomes nearly impossible.

When contacted for comment on the proposed law, Apple, Google, and Meta—the companies that control app downloads and ad revenues—did not immediately reply.

Additional conversations will be held in order to prepare the draft legislation once the consultation period concludes on February 14.

People may find it simpler to switch between competing services like social networking platforms, web browsers, and app stores under the proposed regulation, which is comparable to the European Union’s Digital Markets Act.

The government can select platforms that are most likely to harm competition based on recommendations from the Australian Competition and Consumer Commission.

“Initially, we will look to prioritise app marketplaces and ad tech services for service-specific obligations,” Jones stated.

These particular requirements would ban businesses from giving their own services preferential treatment over those of third parties and from pushing their apps with low user ratings to the top of their search results.

The proposed law was greatly influenced by the Australian Competition and Consumer Commission (ACCC). The government intends to give app marketplaces and advertising technology providers priority for regulatory duties in accordance with its recommendations. According to Jones, these responsibilities would stop businesses from favouring their services over those of rival third parties or from unjustly marketing their own goods, like apps with poor user ratings.

According to a 2022 Competition Commission assessment on digital platform services, Google owned between 93% and 95% of Australia’s internet search services, while Apple’s App Store and Google Play Store accounted for roughly 60% and 40% of app downloads, respectively.

The Meta Platforms Together, Facebook and Instagram provided 79% of the nation’s social media services.

An area of worry has been the domination of tech companies like Apple, Google, and Meta. As per a 2022 ACCC report that was reported by Reuters, Google dominates between 93% and 95% of Australian online search services. With Google Play making up the remaining 40%, Apple’s software Store commands 60% of the market for software downloads.

Unchecked market power stifles competition, innovation, and consumer choice, Jones cautioned. The proposed regulation aims to build a healthier digital ecosystem and level the playing field for smaller players by targeting big platforms.