The Australian Government has now published its eagerly awaited response to the Australian Competition and Consumer Commission's ("ACCC") Final report in its Digital Platforms Inquiry. The Digital Platforms Inquiry was undertaken by the ACCC in order to consider the impact of digital platforms (such as Google and Facebook) on competition in the media and advertising services markets.
The Australian Government's response to the Digital Platforms Inquiry represents a significant victory for the ACCC in its efforts to address concerns about the market power of digital platforms and the perceived detriments flowing from an inequality of bargaining power between the digital platforms and Australian media and advertising companies.
By committing to implement most of the ACCC's key structural recommendations, the Australian Government has affirmed the importance of the role that competition law will play in shaping the regulatory settings for digital platforms.
The three key competition law initiatives that the Government has committed to are:
Establishing a new Digital Platforms Branch
The Government has committed to provide $27 million over four years in order to establish a Digital Platforms Branch within the ACCC. This Branch will monitor and report on the conduct of digital platforms in the areas of competition and consumer protection and undertake enforcement activity as required. It will also be responsible for conducting inquiries directed to be undertaken by the Treasurer, including an inquiry into the online advertising and ad-tech services supply chain in 2020 (announced as part of the Government's response).
Developing a new industry code
The ACCC has been directed to oversee the development of a new 'voluntary' code of conduct which will govern the relationships between digital platforms and news media businesses. The code, which will be binding on both platforms and businesses who sign up to it, will aim to address issues which affect the level of fairness and transparency in the dealings between digital platforms and Australian media companies. The ACCC is required to provide a progress report to the Government on the status of the code negotiations by May 2020, with a view to finalising the code later in the year – i.e. by no later than November 2020. This is one of the more controversial recommendations in the ACCC's final report and one that the digital platforms have vocally opposed.
Reviewing Australia's merger laws
The Government has also committed to commence a consultation process on the amendments to Australia's merger laws proposed by the ACCC in its Digital Platforms Inquiry – Final Report. The ACCC's recommendation was that section 50(3) of the Competition and Consumer Act 2010 (Cth), which forms part of Australia's merger control regime (and sets out the matters that must be taken into account in determining whether an acquisition is likely to lessen competition), expressly refer to: (a) the likelihood of the acquisition resulting in the removal from the market of a potential competitor; and (b) the nature and significance of the assets, including data and technology, being acquired.