Competition regulators in Australia and Europe unite to oppose tech monopolies

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.

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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 anti-competitive mergers, the post-merger road that we subsequently have to take is a very difficult one.”

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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.