Australia Proposes Tough New Law to Curb Big Tech’s Market Dominance

Australia is taking a significant step to challenge the dominance of global tech giants like Apple, Google, and Meta. The government has put forth a new law that could impose huge fines, up to A$50 million (about $33 million USD), on companies that are found to be suppressing competition or because of whom consumers are finding it hard to switch between digital services. Assistant Treasurer Stephen Jones on Monday announced this proposal. The Labor government is keen on bringing this law to level the playing field in the digital economy in Australia’s market. Speaking at the McKell Institute, a think tank based in Sydney, Jones emphasized how the rapid growth of the digital economy has outpaced existing regulations.

“The digital economy is putting our existing legal framework to the test,” Jones said. “Those leading platforms charge higher costs and reduce choices for consumers as well as often use sneaky tactics to keep users locked into their services. For innovators, breaking into markets becomes nearly impossible.”

The new law is intended to restrict self-promotion, the practice of tech giants favoring their own apps and services over those of competitors. As Jones argued, this actually limits competition and hurts consumers.

What Will the Law Do?

If passed, the law would give the Australian Competition and Consumer Commission (ACCC) more power to oversee Big Tech’s activities so that they can investigate anti-competitive practices and impose penalties if violations occur.

App stores and advertising technology would be targeted first, as they have been criticized for being overly concentrated in the hands of a few players. For instance, Apple and Google have been accused of favoring their apps in search rankings, even when those apps have very low ratings. The law will prevent such practices so that third-party apps are not discriminated against.

Market Power of Big Tech

Australia’s digital economy is heavily influenced by a few large companies:

• Google: Handles between 93% and 95% of all online searches in the country.
• Apple’s App Store: Responsible for about 60% of app downloads, with Google Play Store accounting for the rest.
• Meta Platforms: Facebook and Instagram together dominate 79% of social media services in Australia.

These numbers show how concentrated the market is, raising concerns of fewer choices for consumers while smaller competitors are on the verge of extinction.

A Boost for Consumer Choice

The law emphasizes consumer empowerment by being able to switch between services according to their will. For example, users can choose to move their data between social media or go for alternative browsers and apps without unnecessary hurdles. To make this possible, the law will place various obligations on some companies, focusing especially on those that have greater control over the market.

Such obligations will be enforced in the form of blocking, for example, apps rated poorly but owned by the same company from advertising. The government has declared a public consultation period until February 14, 2024, allowing consumers, businesses, and industry experts to express their opinions on the proposed law. After this, the government plans to refine the draft and present it before the parliament later in the year.

Australia is not alone in the movement to regulate Big Tech. The proposed law is inspired by the European Union’s Digital Markets Act, which had similar measures to decrease anti-competitive practices. The USA and Canada are also considering bringing such laws for the tech industry. Stephen Jones believes this global momentum is crucial. “We’re not just protecting Australians,” he said. “We’re contributing to a worldwide effort to make the digital economy fairer for everyone.”

Despite the government’s determination, tech giants like Apple, Google, and Meta are yet to comment on this proposal which could impact their business models.

What It Means for Australians

A more open and competitive digital market in Australia could emerge, with smaller companies having a fairer shot at success, and consumers enjoying greater choices, better prices, and fewer restrictions. This brings a significant change to how the country will address the influence of Big Tech. Such an approach could become an example for creating a better, balanced, and equitable digital economy.

You can also check our news article Whisper-NER: aiOla Unveils an Innovative Solution for Effortless Sensitive Data Masking