Powered by momentummedia
nestegg logo
Powered by momentummedia
nestegg logo
nestegg logo

Invest

Why listed tech giants are copping heat in Australia

By Cameron Micallef · May 27 2019
Reading:
egg
egg
egg
ACCC
Why listed tech giants are copping heat in Australia

Why listed tech giants are copping heat in Australia

author image
By Cameron Micallef · May 27 2019
Reading:
egg
egg
egg
ACCC

Tech giants listed on the Nasdaq have had warning shots fired at them from the competition regulator here at home. 

The Australian Competition and Consumer Commission has flagged mergers and acquisitions by digital platforms that threaten natural competition in the market.

Over the past 12 years, Facebook has acquired 66 companies for a value of US$23 billion, while Google between 2004 and 2014 acquired 145 companies also valued at US$23 billion.

During his address to the 2019 Competition Law Conference, ACCC chair Rod Sims stated that

“There is a growing debate, both in Australia and overseas, as to whether the process of competition for the market is adequately protected by the forward-looking substantial lessening of competition test applied to mergers,” said Mr Sims.

Advertisement
Advertisement

“Arguably, Facebook’s acquisition of Instagram eliminated the threat of a substantial potential competitor,” said Mr Sims.

Under section 50 of the Competition and Consumer Act in Australia, mergers that would threaten competition or likely to threaten competition can be blocked by the ACCC.

Mr Sims has challenged the application of merger laws under these circumstances, which involve the removal of a potential competitor.

In commenting on the consideration of the Facebook-Instagram and Google-Waze mergers, the Competition and Markets Authority in the UK noted: “With the benefit of hindsight, a key challenge posed by such cases in digital markets relates to assessing what may be a small possibility of a large reduction in competition,” said Mr Sims.

“The Digital Competition Expert Panel in the UK led by Jason Furman recommended that a ‘balance of harms’ approach be introduced for assessing mergers under UK competition law. The ‘balance of harms’ approach enables the decision-maker to take into account the magnitude of the foregone benefits to competition the target could bring, and the likelihood of these benefits being achieved,”  said Mr Sims.

The ACCC will provide its final report to the DPI and the Treasurer on 30 June.

This email address is being protected from spambots. You need JavaScript enabled to view it.

Forward this article to a friend. Follow us on Linkedin. Join us on Facebook. Find us on Twitter for the latest updates
Rate the article
author image

About the author

Join The Nest Egg community

We Translate Complicated Financial Jargon Into Easy-To-Understand Information For Australians

Your email address will be shared with nestegg and subject to our Privacy Policy

From the web

Recommended by Spike Native Network

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.

Copyright © 2019 MOMENTUM MEDIA