Sydney, Dec 2 – Australia is set to introduce a groundbreaking law that could levy fines of up to A$50 million ($33 million) against global technology companies accused of stifling competition and limiting consumer choice in the digital marketplace. This proposal aims to ensure a more equitable digital ecosystem, addressing the growing concerns surrounding the influence of Big Tech on innovation and user rights.
The initiative comes as the center-left Labor government intensifies its scrutiny of large technology firms. This follows recent legislative moves, including a law passed last week prohibiting children under 16 from using social media platforms. The proposed legislation will grant the Australian Competition and Consumer Commission (ACCC) new powers to enforce compliance, investigate anti-competitive behavior, and impose significant penalties where violations are found.
Assistant Treasurer Stephen Jones emphasized the urgent need for reform in the digital economy. In an upcoming address to the McKell Institute, a public policy research group in Sydney, Jones highlighted the dominance of major digital platforms and their impact on competition.
“The current legal framework struggles to address the challenges posed by the digital economy,” Jones is expected to state. “Dominant platforms can exploit their position to increase costs, limit consumer choices, and deploy deceptive tactics that lock users into their ecosystems. Such practices stifle innovation and create barriers for emerging competitors.”
A Focus on Big Tech’s Practices
Major players in the tech sector, including Apple, Google, and Meta, have faced criticism for their dominant positions in app marketplaces, advertising technology, and social media services. These companies are often accused of using their influence to prioritize their own products and services while disadvantaging competitors.
The legislation draws parallels with the European Union’s Digital Markets Act, which aims to curb the monopolistic behavior of dominant digital platforms. By fostering a competitive environment, the Australian government hopes to empower consumers to switch between services without undue restrictions.
The proposed law targets specific sectors initially, such as app marketplaces and ad tech services. It seeks to prevent practices like promoting low-rated apps in search rankings and providing preferential treatment to a company’s own offerings over those of third-party developers.
Tackling Monopolistic Structures
Data from a 2022 ACCC report underscores the monopolistic nature of Australia’s digital economy. Google holds a staggering 93% to 95% market share in online search services, while Apple’s App Store commands 60% of app downloads, with Google Play Store accounting for the remaining 40%. In the realm of social media, Facebook and Instagram, both owned by Meta Platforms, collectively dominate 79% of the market.
Jones highlighted these figures in his speech, emphasizing the need for regulatory measures. “Platforms with such overwhelming dominance have the power to limit competition and innovation. This legislation will provide the necessary tools to challenge and correct these imbalances,” he said.
Public Consultation and Next Steps
The proposed law is currently in the consultation phase, with feedback being sought until February 14. This period will allow stakeholders, industry representatives, and the public to weigh in on the proposed measures before the draft legislation is finalized.
The legislation’s framework will empower the ACCC to identify platforms that pose the greatest risks to competition. By targeting sectors where monopolistic practices are most pronounced, the government aims to create a level playing field for all participants in the digital economy.
This reform underscores Australia’s commitment to holding technology companies accountable for their practices and ensuring that innovation and competition are not undermined. While the tech giants have yet to comment on the proposal, the initiative represents a significant step toward reshaping the relationship between consumers, businesses, and digital platforms.
As the digital landscape continues to evolve, Australia’s proactive approach could serve as a model for other nations grappling with similar challenges in regulating Big Tech. The coming months will reveal the extent of the legislation’s impact and its potential to foster a more competitive and transparent digital economy.