The Australian government introduced a new legislative proposal on Monday aimed at imposing hefty fines on major technology firms, with potential penalties reaching up to AUD 50 million (approximately $33 million or Rs. 279 crore) for engaging in anti-competitive practices and making it difficult for consumers to switch services.
This initiative is part of the center-left Labor government’s broader strategy to address the pervasive influence of Big Tech. Recently, the parliament passed a law that prohibits social media access for individuals under the age of 16.
Under the proposed legislation, Australia’s competition regulator would gain authority to monitor compliance, investigate anti-competitive behavior online, and impose fines on companies found in violation. Assistant Treasurer Stephen Jones outlined these points in excerpts from a forthcoming speech.
“The digital economy poses challenges to our current legal framework,” Jones is expected to say during his address at the McKell Institute, a public policy research organization in Sydney.
“Dominant platforms can impose higher costs, limit choices, and use deceptive tactics to lock consumers into particular products, making it nearly impossible for innovative alternatives to flourish.”
Despite the significant implications of the proposed legislation, major players in the tech sector, including Apple, Google, and Meta, have yet to provide a comment regarding the new law.
The consultation phase for this proposal will conclude on February 14, with further discussions anticipated to refine the draft legislation.
This legislative effort draws inspiration from the European Union’s Digital Markets Act, aiming to facilitate easier navigation among competing services such as social media platforms, web browsers, and app stores.
The Australian government, acting upon recommendations from the Australian Competition and Consumer Commission, intends to target platforms that are deemed most likely to hinder competition.
“Initially, our focus will be on app marketplaces and advertising technology to establish service-specific obligations,” Jones plans to state.
The proposed obligations would curtail practices such as promoting low-rated apps to higher visibility in search results and providing preferential treatment to a company’s own services over those of competitors.
A report from the competition commission in 2022 highlighted that Google commanded a market share of 93 to 95 percent in online search services within Australia, while Apple’s App Store accounted for about 60 percent of app downloads compared to Google Play Store’s 40 percent. Additionally, Meta’s Facebook and Instagram together represented 79 percent of the social media market in the country.
© Thomson Reuters 2024
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