The Australian government introduced proposed legislation on Monday that could levy fines of up to AUD 50 million (approximately $33 million or Rs. 279 crore) against international technology companies for stifling competition and hindering consumer choice.
The center-left Labor administration is taking aim at the dominance of major tech firms, following the recent passage of a law that prohibits social media access for children under 16.
According to Assistant Treasurer Stephen Jones, the new proposal would authorize Australia’s competition regulator to ensure compliance, examine anti-competitive behavior in the digital space, and impose fines on offending companies. Jones made these remarks in previewed excerpts of a speech scheduled for later on Monday.
“The digital economy presents challenges to our existing legal framework,” Jones will assert in his address at the McKell Institute in Sydney, a public policy research organization.
“The prevalent platforms can impose higher costs, limit choices, and deploy deceptive strategies to keep consumers tethered to specific products. This environment stifles innovation among emerging players.”
Major companies such as Apple, Google, and Meta, which dominate app downloads and online advertising revenue, have not yet provided feedback on the proposed law.
The government plans to conclude its consultation phase by February 14, after which further discussions will be held to refine the draft legislation.
This initiative is reminiscent of the European Union’s Digital Markets Act and aims to enhance the ease with which consumers can transition between competing services, including various social media platforms, web browsers, and application stores.
The Australian Competition and Consumer Commission will advise the government in identifying the platforms that pose the most significant risks to competition.
“Our initial focus will be on app marketplaces and advertising technology services that will have service-specific responsibilities,” Jones is expected to state.
These responsibilities would prohibit companies from artificially boosting their own apps with low user ratings in search results and prevent them from giving preferential treatment to their services over competitors.
A competition commission report from 2022 highlighted that Google commands between 93 percent to 95 percent of online search services in Australia, with Apple’s App Store accounting for about 60 percent of app downloads, while Google Play Store captures 40 percent.
Additionally, Meta’s platforms, Facebook and Instagram, collectively represent 79 percent of social media services in the nation.
© Thomson Reuters 2024
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