Australia Proposes Fines for Big Tech Under New Digital Competition Law

Australia is taking a bold step to tackle anti-competitive practices by proposing a law aimed at making it easier for consumers to switch between digital services and curbing the influence of major technology companies. Under the proposed legislation, global tech giants could face fines up to $50 million if they suppress competition or employ tactics that lock consumers into their services, making it harder for them to explore alternative options. The law targets the practices of large technology platforms like Apple, Google, and Meta, which dominate key digital services such as social media, app stores, and online search.

The Labor government’s push to regulate Big Tech follows increasing concerns about the disproportionate control these companies hold over the digital economy and their potential to stifle innovation. According to Assistant Treasurer Stephen Jones, the current legal framework is inadequate to address the challenges posed by these dominant platforms. He highlighted how these companies can drive up costs, limit choice, and use underhanded tactics to keep consumers tied to their services. In many cases, innovation from smaller competitors is effectively quashed as they struggle to compete with the market power of these established players.

The proposed law would give Australia’s competition regulator the authority to enforce compliance, investigate potential anti-competitive practices, and impose significant fines. The goal is to create a more competitive digital marketplace, ensuring that consumers have the freedom to explore and switch between competing services, whether that’s social media platforms, internet browsers, or app stores. In essence, it would make it easier for users to move away from one service and adopt another, driving better service quality and greater innovation.

This proposal aligns with international efforts to regulate the power of Big Tech. It draws inspiration from the European Union’s Digital Markets Act, which aims to curb anti-competitive practices among large digital platforms. If passed, the Australian law would provide a legal framework to tackle unfair practices, such as pushing low-rated apps to the top of search results or offering preferential treatment to a company’s own services over those of third parties.

As part of the consultation process, the Australian government will identify platforms that pose the highest risk to competition and prioritize them for regulation. Initially, the government plans to focus on app marketplaces and ad-tech services. The law would require platforms to provide more transparent and fair ranking systems for apps and services, ensuring that third-party services are not unfairly disadvantaged.

The Australian Competition and Consumer Commission (ACCC) has already highlighted the overwhelming dominance of major platforms in the digital services market. For example, Google controls between 93 percent and 95 percent of online search services in Australia, while Apple’s App Store accounts for around 60 percent of app downloads, and Google Play Store holds 40 percent. Meta’s Facebook and Instagram together command approximately 79 percent of social media services in the country.

The consultation process for the proposed law will continue until February 14, 2025, with additional discussions planned to help shape the draft legislation. If enacted, the law could significantly reshape the digital landscape in Australia, creating a more competitive environment and offering consumers greater freedom to choose between services. While tech giants like Apple, Google, and Meta have yet to comment on the proposed law, its potential to disrupt their business models is clear.