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.

“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.

About the author

Cameron is a journalist for Momentum Media's nestegg and Smart Property Investment. He enjoys giving Aussies practical financial tips and tricks to help grow their wealth and achieve financial independence. As a self-confessed finance nerd, Cameron enjoys chatting with industry experts and commentators to leverage their insights to grow your portfolio.

About the author

Cameron is a journalist for Momentum Media's nestegg and Smart Property Investment. He enjoys giving Aussies practical financial tips and tricks to help grow their wealth and achieve financial independence. As a self-confessed finance nerd, Cameron enjoys chatting with industry experts and commentators to leverage their insights to grow your portfolio.

Cameron is a journalist for Momentum Media's nestegg and Smart Property Investment. He enjoys giving Aussies practical financial tips and tricks to help grow their wealth and achieve financial independence. As a self-confessed finance nerd, Cameron enjoys chatting with industry experts and commentators to leverage their insights to grow your portfolio.

more on this topic

Stock market

Russell rebalance reshapes investment landscape amid SpaceX IPO buzz

As the world eagerly anticipates SpaceX's historic initial public offering today, a significant shift is quietly occurring in the financial markets, one that could have profound implications for both ...Read more

Stock market

Franklin Templeton expands active ETF suite with new global equity and income strategies

In a strategic move to broaden its investment offerings, Franklin Templeton has announced the launch of two new active exchange-traded funds (ETFs) on the Australian Securities Exchange (ASX)Read more

Stock market

ASX companies make strides amidst federal budget chatter

In a week dominated by discussions surrounding the recently released FY27 federal budget, the financial landscape witnessed significant activity, particularly among ASX-listed companiesRead more

Stock market

ASX small caps report mixed results amid market optimism

The latest flurry of quarterly activities reports from ASX-listed small cap companies has provided a snapshot of the diverse and dynamic landscape of Australia's financial market. As April came to a ...Read more

Stock market

Adisyn Limited and Brazilian Critical Minerals make significant strides in their respective sectors

In a landscape where Australia's Information Technology sector often plays second fiddle to global giants, Adisyn Limited (ASX: AI1) is making waves with its innovative advancements in graphene ...Read more

Stock market

Australia's ASX 200 Energy Index surges amid Iran conflict

Australia's ASX 200 Energy Index has surged nearly 20% since the onset of the Iran conflict, marking its highest level in three months. This development positions Australia as the only developed ...Read more

Stock market

Webull launches Webull Connect, revolutionising access for Australian financial advisers

In a significant move that marks its entry into the Australian wealth management sector, Webull Securities (Australia) Pty Ltd, a subsidiary of the Nasdaq-listed Webull Corporation, has unveiled its ...Read more

Stock market

Future Generation Global boosts dividends with special payout, marking significant yield increase

Future Generation Global (ASX: FGG) has announced a significant boost to its dividend offerings for the year 2025, delighting shareholders with an increased fully franked full-year dividend and an ...Read more