ACCC well placed for digital era


By Dylan Bushell-Embling
Monday, 15 October, 2018


ACCC well placed for digital era

Competition and consumer laws may need to be updated for the data economy, but the ACCC is well placed to deal with a range of future data issues, according to the body’s Chairman, Rod Sims.

During a speech to the Gilbert & Torvin seminar covering the data economy on Monday, Sims said the emerging digital economy brings a host of new challenges for global regulators.

“One of the key challenges with merger cases in digital markets is predicting the likelihood of future competition between the target and the acquirer,” Sims said.

“In fast-moving markets, this is clearly difficult, particularly when the target is a start-up or currently only active in a neighbouring market. Such transactions can end up leading to a large reduction in competition but, at the time of merger review, the chance of this occurring may well be considered low or difficult to predict.”

As an example, when Facebook acquired Instagram in 2012 it was a niche social platform with just 13 employees. But it has since grown to be the second most popular social media platform in Australia behind Facebook itself.

“It would be extremely difficult to predict what was going to happen in social media in the last five years, including whether in the absence of the acquisition by Facebook, Instagram would have grown and become an independent challenger to Facebook,” he said.

“We do know where we are now. Instagram is the second-largest social media platform, by some margin, after the Facebook platform in terms of the number of monthly active users in Australia.”

Due to these and other challenges involved with determining the impact of competition of a merger on a market, regulators worldwide are evaluating and implementing legislative changes.

Sims gave the example of Germany, where the nation’s Competition Act was recently amended to clarify that services offered can still constitute a market even in cases where no monetary payment is involved, and to identify factors that can be used to better evaluate digital markets and online competition, such as innovation driven competitive pressure or barriers to switching providers.

“We don’t think we need the first change and have not yet reached a view on the second. While the ACCC may take into account such factors under the current law, there may be some benefit in making this clear in legislation, particularly given that the Tribunal and the courts also apply these tests,” he said.

“Nevertheless, the German changes highlight the international focus on these issues.”

Sims also addressed the ACCC’s role in enforcing the new Consumer Data Right.

“This is an exciting new role for the ACCC which is throwing up many new issues for the ACCC and no doubt many more to come. We are out there talking to banks, consumer groups, FinTechs and broader stakeholders,” he said.

Ultimately, despite presenting new challenges, the regulatory issues emerging in the data economy are in many ways incarnations of those seen in developed markets, Sims said.

“The ACCC is very well placed to deal with a range of future data issues, including in relation to enforcement. The consumer data right, and the digital platforms inquiry, set us up very well indeed for the issues to come.”

Image: ACCC Chairman, Rod Sims. Courtesy ACCC.

Please follow us and share on Twitter and Facebook. You can also subscribe for FREE to our weekly newsletter and quarterly magazine.

Related Articles

Huawei losing access to Android after US trade ban

Australia's third-biggest smartphone vendor, Huawei, has been dealt a potentially devastating...

Industry bodies call on govt to support IT sector

The Australian Information Industry Association and StartupAUS have called on the government to...

It's the vision, stupid! Why we need #BetterBroadband

While neither side of politics is saying much about our increasingly maligned National Broadband...


  • All content Copyright © 2019 Westwick-Farrow Pty Ltd