Corporate Regulation
MISUSE OF MARKET POWER
The ACCC proposed that designated digital platforms should each separately be required to provide a code of conduct to the Australian Communications and Media Authority ( ACMA ) to govern their commercial relationships with news media businesses, which is aimed at addressing the imbalance in the bargaining relationship between these organisations. The ACMA would closely consult with the ACCC in performing its role under this recommendation, and it is proposed that breaches of the code would be dealt with by the ACMA, which would be vested with appropriate investigative and information gathering powers and the capacity to impose sufficiently large sanctions for breaches to act as an effective deterrent. TheACCCalso recommended that changes be made to the Privacy Act 1988 (Cth) to allow consumers to make more informed decisions about the use and collection of their personal information, including the strengthening of consent requirements. It is also proposed that the Office of the Australian Information Commissioner engage with digital platforms to develop an enforceable code of practice. The ACCC noted that in March 2019, the Government announced the creation of a legislated code to apply to social media and online platforms which trade in information and the ACCC’s recommendation could align with and be taken into account in the Government’s consideration of the substance and reach of that code.
There is an expectation that following the introduction of new competition laws at the end of 2017, the ACCC may look to test the new misuse of market power prohibition in 2019. Under the previous market power provisions, it was necessary to demonstrate that a business was misusing its market power for the “purpose of substantially lessening competition”. The new test in section 46 of the Competition and Consumer Act 2010 (Cth) is broader and it is now sufficient to demonstrate that conduct taken by a business has the “purpose, effect or likely effect of substantially lessening competition”. Any company that has substantial market power in a particular market should carefully consider whether its practices might result in a substantially lessening of competition. Such a result may arise even where the intention of the conduct is to create greater competition. In 2018, the ACCC released an update of its Guidelines on misuse of market power. The ACCC has undertaken the world’s first review of the role of digital platforms in the economy. The ACCC’s final Digital Platforms Report was released in July 2019 and considered the impact of digital search engines, social media platforms and digital content aggregation platforms on media and advertising, with a large focus on Google and Facebook. DIGITAL PLATFORMS
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