Introduction
Australia, in common with other major economies, has faced significant challenges in applying traditional competition law frameworks to the rapidly evolving digital economy. The growth of large digital platforms, often characterised by network effects and extensive data collection, has prompted a substantial re-evaluation of regulatory approaches. The development of Australian digital competition law has been a careful and investigative process, driven primarily by the Australian Competition and Consumer Commission (ACCC). This development has progressed from initial inquiries identifying market failures to the implementation of targeted interventions and, more recently, proposals for a new comprehensive regulatory regime to address systemic competition issues.
The Digital Platforms Inquiry
The key starting point for modern digital competition law in Australia كانت the ACCC’s Digital Platforms Inquiry (DPI), which published its final report in 2019. This landmark inquiry was tasked with examining the market power of platforms like Google and Facebook and their impact on competition in media and advertising markets (ACCC, 2019). The report found that these major platforms held substantial market power, which was not being effectively constrained by existing competition. The ACCC identified a range of harms, including a lack of transparency in how algorithms rank news content, unfair commercial dealings with news media businesses, and problematic data collection practices that raised consumer welfare concerns (ACCC, 2019). The DPI made 23 recommendations, setting the agenda for a wave of regulatory reform and scrutiny that continues today.
Targeted Intervention: The News Media Bargaining Code
A direct and significant outcome of the DPI was the creation of the Treasury Laws Amendment (News Media and Digital Platforms Mandatory Bargaining Code) Act 2021 (Cth). This legislation, commonly known as the News Media Bargaining Code, was designed to address the profound bargaining power imbalance between designated digital platforms (initially Google and Meta) and Australian news businesses (Australian Government, 2021). Rather than relying on traditional competition law, the Code established a framework that requires designated platforms to negotiate in good faith with registered news businesses for payment for the news content they use. If negotiations fail, the Code provides for a compulsory arbitration process. While it remains a subject of debate, the Code represented a novel regulatory tool designed to solve a specific problem identified by the ACCC, demonstrating a willingness to move beyond existing legal frameworks (Carney, 2021).
The Shift Towards Systemic Regulation
Following the DPI, the ACCC commenced a five-year Digital Platform Services Inquiry (2020-2025) to conduct rolling investigations into specific digital markets. The findings from this ongoing inquiry have reinforced the ACCC's view that the enforcement of general competition rules under the Competition and Consumer Act 2010 (Cth) is insufficient to address the harms caused by digital platforms. In its fifth interim report, the ACCC argued that existing laws are often too slow and ill-suited to deal with the fast-paced and complex nature of digital markets (ACCC, 2022).
Consequently, the ACCC proposed the introduction of a new, proactive or ‘ex ante’ regulatory regime. This would involve designating firms with ‘Strategic Market Status’ (SMS) and imposing tailored obligations on them to address anti-competitive conduct, such as self-preferencing, and to improve transparency and fairness in their dealings with other businesses (ACCC, 2022). In December 2023, the Australian Government responded to the ACCC’s proposals, agreeing in principle to develop new legislative powers to regulate digital platforms, including a mandatory code of conduct for designated platforms to address anti-competitive behaviour (The Treasury, 2023).
Conclusion
The development of digital competition law in Australia has been methodical and evidence-led. It began with the ACCC’s comprehensive investigation into the market power of digital platforms, which identified clear market failures and harms. This led to a specific, targeted intervention in the form of the News Media Bargaining Code to address an immediate issue in the news media sector. The process has now evolved towards a consensus that broader, more flexible, and proactive regulation is needed. With the government’s commitment to developing new ex ante rules for designated platforms, Australia is set to join jurisdictions like the European Union in creating a dedicated legal framework to ensure competition and fairness in the digital age.
References
ACCC (Australian Competition and Consumer Commission). (2019) Digital platforms inquiry: Final report. [online] Available at: https://www.accc.gov.au/publications/digital-platforms-inquiry-final-report (Accessed: 15 May 2024).
ACCC (Australian Competition and consumer Commission). (2022) Digital platform services inquiry: Interim report no. 5 – Regulatory reform. [online] Available at: https://www.accc.gov.au/publications/digital-platform-services-inquiry-interim-report-no-5-regulatory-reform (Accessed: 15 May 2024).
Australian Government. (2021) News media and digital platforms mandatory bargaining code. [online] Available at: https://treasury.gov.au/policy-topics/market-and-competition/news-media-and-digital-platforms-mandatory-bargaining-code (Accessed: 15 May 2024).
Carney, T. (2021) 'Bargaining in the shadow of the media code: what does it tell us about the future of tech regulation?', Australian Business Law Review, 49, pp. 238-243.
The Treasury. (2023) Regulating digital platforms: Government response to ACCC's Digital Platform Services Inquiry reports. [online] Available at: https://treasury.gov.au/consultation/c2023-455437/government-response (Accessed: 15 May 2024).
