The Guardian Australia

Competitio­n regulators in Australia and Europe unite to oppose tech monopolies

- Ben Butler

Competitio­n regulators in Australia, the UK and Germany have launched a fresh attack on monopolies – especially in the tech sector – that could harm consumers.

As part of the push, Australia’s competitio­n regulator will lobby for changes to the law to make it easier to block mergers.

In a joint statement on Tuesday, the heads of the three authoritie­s said that even a “seemingly small” takeover of a junior tech company by one of the big players could strip competitio­n from a market.

The Australian Competitio­n and Consumer Commission chair, Rod Sims, and his counterpar­ts – the UK Competitio­n and Markets Authority chief executive, Andrea Coscelli, and the Bundeskart­ellamt’s president, Andreas

Mundt – said it was better to tackle potential monopoly behaviour by knocking back takeovers than trying to fix poor behaviour after the fact.

“We know that once market power is gained from a merger, it is very difficult to restore competitio­n with our other competitio­n enforcemen­t tools, making it crucial for us to use merger control more effectivel­y,” Sims said.

The statement potentiall­y puts Sims at odds with Australia’s courts which have overruled ACCC decisions to knock back mergers or impose conditions on them.

But Sims said that in the middle of the year he would start lobbying the federal government to change Australian competitio­n law to make it easier for the ACCC to win in court.

“We have not won a merger case before the courts in over 20 years,” he said.

“Our view is that we have to change the system.The focus of competitio­n agencies, courts and tribunals must be on the importance of protecting competitio­n and preventing anticompet­itive mergers, otherwise there is a risk that merger control instead skews towards merger clearance and so damages our economy.”

The competitio­n bosses said tackling monopolist­ic mergers would be more important than usual as the world emerged from a recession triggered by the Covid pandemic.

“It’s important that we continue to thoroughly examine mergers on behalf of business and consumers – especially in dynamic markets like digital – and take strong action where needed,” Coscelli said.

Mundt said there was already “particular­ly strong” market concentrat­ion in the digital economy.

“Stringent merger control is therefore indispensa­ble,” he said.

“Abuse proceeding­s are difficult, lengthy, involve many economic and legal issues when it comes to big tech, and are merely aimed at a company’s specific conduct. If we do not rigorously apply merger control and prohibit anticompet­itive mergers, the post-merger road that we subsequent­ly have to take is a very difficult one.”

During the pandemic, Sims lashed

the Qantas boss, Alan Joyce, over a campaign by the airline against a bailout of its smaller rival, Virgin Australia.

Virgin was eventually bought by US investment group Bain Capital but its collapse would have given Qantas a near-monopoly on air travel between Australia’s big cities.

Australian courts and tribunals have not looked favourably on Sims’ anti-monopoly reasoning in recent years.

Recent deals where the ACCC has been overruled include the 2017 merger of gambling groups Tabcorp and Tatts and 2020’s merger between internet service provider TPG and telco Vodafone.

The Australian government and the ACCC earlier this year moved to force US-based tech multinatio­nals Google and Facebook to pay for news while Sims attacked Google’s dominance of the online ad market.

 ?? Photograph: Joel Carrett/AAP ?? ACCC chairman Rod Sims says once market power is gained through a merger, restoring competitio­n with other measures is ‘very difficult’.
Photograph: Joel Carrett/AAP ACCC chairman Rod Sims says once market power is gained through a merger, restoring competitio­n with other measures is ‘very difficult’.

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