New ACCC plan laws spells tough times for big tech

The Australia subsidiaries of big tech firms are likely going through a rough patch as the Australian Competition and Consumer Commission (ACCC) is mulling tweaking laws governing them. The new regulations are expected to tighten the digital payment services by the tech giants like Apple, Facebook, and Google.

Representative Image Source: © Jirsak | Megapixl.com

To counter dominance of Apple and Google’s app stores the Australian government will be given the power to designate tech companies as payment providers which will clarify the regulatory status of the digital wallets, as per the proposed tweaks.

What is ACCC?

Australian Competition and Consumer Commission (ACCC) is an independent authority promoting competition and honesty between consumers and businesses.

The regulator has been closely monitoring the digital platform services since 2017. Earlier in August, Rod Sims, chair of ACCC, highlighted that the dominance of Apple and Google in app marketplaces need to be tackled globally. Google dominates the market with around 73% share compared Apple’s 27%, globally, even though the split stands 50/50 in Australia.

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In a speech to the Global Competition Review webinar, Sims outlined how the Australian government has been tackling this situation through ACCC’s digital platform service inquiry. According to the new regulations, the services like app stores can be declared as regulated services that will use similar rules to those now governing the telecom sector in Australia.

Moreover, in August, the Bank of International Settlements (BIS) also called for the global financial watchdogs to deal with the growing influence of big tech. The BIS also highlighted the issue of huge amounts of data control by big tech firms like Google, Alibaba, Facebook and Amazon.

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Some highlights

According to a recent release by ACCC, app developers need to have a fair and reasonable terms while dealing with app stores. They need a better process to approve apps so that it will help in addressing the consequences of Google and Apple’s influence in the app market.

Representative Image Source: © Jirsak | Megapixl.com

As per ACCC, although Apple and Google stores are gateways between the consumers and the app developers, but the market operation is the main concern. Apple and Google have their own apps, despite running the app marketplace. Such tech giants can self-promote their apps with a big market control. Hence, to address this big level of market influence, ACCC believes that the app developers should also have more information about their app business in the market.

The Commission also urged that Apple and Google should be restricted from collecting or using the information collected about any third-party app to advantage their own apps.

Concerned with the restrictions imposed by Apple and Google on their payment services, leaving the developers with no choice but to use their own payment services, ACCC has put forward a series of potential measures:

• consumers will be able to review and rate all apps.
• They will have the ability to change any pre-installed default app on their devices.
• App developers will also be allowed to provide consumers with information regarding an alternative payment option.
• The app developers will be allowed to inform the consumers about all the information collected by Apple and Google as app marketplace operators.

Other measures –

ACCC’s Digital Platform Branch is now conducting a five-year inquiry into the markets for supply of digital platform services in Australia. It has also recommended that the government and industry should come together to establish a strategic plan for the broader payments ecosystem.