The framework prioritises internal and international coherence, referencing the provisions of the DSA and DMCC Act while mirroring existing regulation of the sector
The Government's proposed regulation of digital competition is a response to the ACCC's long-run platforms inquiry
On 2 December 2024, the Australian Government, through the Treasury, opened a public consultation on its proposed framework for a new digital competition regime. The proposal paper follows on from the Australian Competition and Consumer Commission’s (ACCC) Digital Platform Services Inquiry that launched in 2020. Through biannual reports released throughout its inquiry, which will conclude in March 2025, the ACCC recommended that a new regulatory framework was necessary to address the anti-competitive conduct it had identified in a number of different digital markets. In introducing its proposal, the Government referenced similar frameworks that have been proposed or adopted elsewhere, including Brazil, the EU, Germany, India, Japan, South Korea and the UK, and noted that these policymakers in these jurisdictions had reached similar conclusions about the need for ex-ante regulation. Relevant stakeholders are able to submit comments on the proposal paper until 14 February 2025.
Designation decisions will ultimately lie with the Government, following an investigation from the ACCC
The Government has proposed to identify the ACCC as the regulator primarily responsible for the implementation and enforcement of the framework. Under the proposal, the ACCC would conduct designation investigations lasting no more than six months into selected digital markets, considering quantitative (such as revenue or user base) and qualitative (such as intermediary position) thresholds that the Government states are broadly aligned with the measures employed under the Digital Markets Act (DMA) in the EU and the Digital Markets, Competition and Consumers (DMCC) Act in the UK (see Table 1). The relevant Government minister would then issue a designation decision lasting for five years to specific firms based on the findings of the regulator’s investigations. Based on the research conducted through the ACCC’s ongoing digital platforms inquiry, the Government has identified app marketplaces, ad tech services and social media platforms as priority markets for designation investigations.
The Australian approach combines the EU’s use of horizontal obligations and the UK’s bespoke conduct requirements
In designing ex-ante obligations for designated platforms, the Australian Government again took inspiration from both the predetermined and horizontal requirements made of all platforms designated under the DMA, as well as the bespoke conduct requirements that may be imposed on individual firms by the Competition and Markets Authority (CMA) and its Digital Markets Unit (DMU) in the UK. Any platform designated under the Australian approach would be prohibited from engaging in broad categories of anti-competitive behaviour, including:
Self-preferencing;
Tying of services;
Impediments to consumer switching;
Restrictions on interoperability;
Unfair treatment of business users; and
Lack of transparency.
However, the Government, in consultation with the ACCC, could also put forward market-specific regulation that would introduce specific obligations for any designated firm operating within a given market. In the example of the ad tech stack, these obligations could include a prohibition on a firm preferencing its own ad publishing and ad selling services on either side of the ad tech stack. While broadly aligned with the EU and UK approaches to obligations, the Government’s framework also aligns well with other regulatory frameworks for the digital economy in Australia, such as the creation of industry or sector specific codes of conduct through the Online Safety Act 2021 and the proposed Scams Prevention Framework.
The Government prioritised international coherence in compliance and enforcement while stopping short of allowing for structural remedies
The Government again placed a priority on international coherence in describing the ACCC’s powers to enforce its proposed framework. The regulator would be given the power to issue exemptions from obligations for specific platforms on the grounds of some level of countervailing benefit, as in the UK, as well as on the grounds of coordination with exemptions issued in other jurisdictions. The ACCC would also be provided with a mechanism to factor international coherence into proposed compliance measures from platforms, suggesting that proven compliance with the DMA or DMCC Act could assist in proving a platform’s compliance in Australia. If a platform is found to be in violation of the proposed framework, the ACCC would be empowered to issue fines of up to A$50m (£25m), three times the value of the benefit of the illegal conduct or 30% of adjusted turnover during the breach period, in line with the recently updated maximum penalties in existing Australian competition law. The Government does propose that the ACCC has the power to further impose behavioural remedies on platforms found in violation of the law, but specifically stops short of granting the regulator the ability to impose structural remedies as allowed under the DMA and DMCC Act. However, in another look abroad, the ACCC would be empowered to require that structural remedies imposed under a comparable international regime be rolled out in Australia as well.
