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Australian Regulations Detrimental to the Digital Economy: The ACCC’s Code of Conduct Reaches Parliament

· January 22, 2021

map of Australia

As many Disruptive Competition Project readers know, late last year Australia drafted a Code of Conduct to regulate Google and Facebook with respect to news media producers.  Our DisCo series on the proposal discussed the different issues of concern from competition, copyright, and trade angles as the Draft Code of Conduct was being discussed within the Australian Competition and Consumer Commission (ACCC). 

While it is of great importance to present public interest news production, in finding solutions to that end, some regulatory proposals risk causing irreparable damage to the Internet ecosystem.

The Code of Conduct is now being discussed before the Australian Parliament.  Unfortunately, the draft bill being discussed maintains many of the issues of concern explained in our DisCo series such as international trade commitments, copyright, and competition.  Furthermore, the draft Bill continues to grant the executive the discretionary power to select which companies will be affected by the regulation. Companies should not be the targets of regulation due to a discretionary decision which can change through shifting administrations but rather through a standard properly determined that applies equally to all who fall under the Code of Conduct.

If this draft Bill is enforced without introducing changes to the current text, Australia will negatively impact the functioning of the Internet, impose wealth transfer obligations on successful companies, and entrench the Australian news sector which is monopolized by a few powerful incumbents to the detriment of Australians themselves. Our series on the Code of Conduct serves to outline the key challenges of the proposal and why they should be addressed before moving forward.

Competition

Some, if not all of society’s most useful innovations are the byproduct of competition. In fact, although it may sound counterintuitive, innovation often flourishes when an incumbent is threatened by a new entrant because the threat of losing users to the competition drives product improvement. The Internet and the products and companies it has enabled are no exception; companies need to constantly stay on their toes, as the next startup is ready to knock them down with a better product.