LAURA JAYES:
Let’s go to the Assistant Treasurer now and Financial Services Minister, Stephen Jones. Stephen, thanks so much for your time. I spoke briefly with David there about your plan slated in a speech. So, let’s get to some of the details on this. This is about Big Tech and anti‑competitive behaviour. So, could we start by perhaps looking at some of the worst examples of anti‑competitive behaviour from the tech giants? What have you seen?
STEPHEN JONES:
Yeah, look, there’s no doubt that Big Tech provides an amazing service. Whether it’s social media platforms, whether it’s streaming platforms, whether it’s new shopping and market platforms. They connect us to the world as buyers and sellers of goods and services, but they’ve got enormous power. If you’re a small business operating in Australia and you’re not on Facebook or Instagram, you’re not in the game. If you don’t have, if you don’t appear in a Google search, then you’re disadvantaged. They’re gatekeepers and rule makers when it comes to those entry points to the economy and they make rules to suit themselves, don’t blame them for that. But they don’t make rules to suit Australians, Australian consumers or small businesses.
Now we’ve got to intervene to ensure that we’ve got a bit more balance in here. So, the sorts of things that we’re looking at and focusing on; self‑preferencing, when the platforms use their algorithms and the way they direct traffic to preference their own commercial interests as opposed to theirs or their competitors or the interests of the consumer. That’s high on the list. The access to app stores, who gets in, the conditions on which they get in, the requirement to use their own payment platforms as a means of shopping inside an app. All of those sorts of things are on the agenda. We want to get a better deal for consumers and a better deal for small businesses.
JAYES:
What you’re talking about is pretty blatant anti‑competitive behaviour, isn’t it? That practice known as tying when it comes to the app stores. A 30 per cent cut in the apps. I mean Apple Pay for one as well. What about Apple Pay and that system? How can you fix that?
JONES:
Yeah, yeah. We want to ensure that people aren’t mandated to use a service that is not in their interest or where they can get a better payment service provider by not being tied to the one that the app store says that they’ve got to use or makes it almost impossible for them to not use. So, yes, it’s tying, yes, it’s self‑preferencing, yes, it’s the use of their algorithm to direct people towards their interests and a way to their competitive interests. It’s the gatekeeping rules. It’s all of these issues that are going to be under scrutiny with a regulator having new broad powers to be able to intervene in these markets, particularly where we see the anti‑competitive behaviour going on and tough penalties and enforcement powers available to the regulator as well.
JAYES:
Have you looked at the European Union model here? Is that the best one that works?
JONES:
There are a lot of countries moving in this, so definitely the European Union and the UK have taken a slightly different approach. We’re learning from both. But the Japanese approach is also useful for us to look at. And another emerging economy with a big play in Big Tech is India and they’re in the throes of introducing new markets – digital market competition laws as well. So, the whole world is moving in this area. We won’t be the first mover, but we don’t intend to be the last either. We want to ensure that Australia is a fair place to do business and a better place for consumers when they’re shopping online.
JAYES:
Ok, so what powers will you give the ACCC and is this tied to more funding so they can do the job well?
JONES:
Look, there’ll be funding involved in this, but the main thing is getting the rules right. So, prohibiting certain sorts of behaviour. So requiring for example, an app provider to use apps, payment methodologies and payment systems would be one of the areas that we would dig into. Requiring preferencing for a platform provider in all the apps designs, as opposed to their competitors would be another area that we’re looking into. The gatekeeping rules and the rules that make it possible for a digital platform to withdraw service almost without notice, crippling a small business and leaving them high and dry without them having recourse to any dispute resolution processes in those sorts of circumstances. There are some of the examples of the behaviours that we want to drill into and we want to outlaw, but there’ll be others. We will start with the app stores and we’ll start with Ad Tech and the sorts of behaviours that is going on in both of those areas. But it won’t end there.
JAYES:
Ok, so what are we talking about here. So, I know this is a priority for you, but going into an election year, people I think are very attuned to the idea or the reality, I should say, that Big Tech do not pay their fair share of tax in Australia and they certainly have a dominance. If you run a small business, everything that you’ve talked about in terms of anti‑competitive behaviour people will be absolutely attuned to. Can this be fixed or are we just talking about tinkering around the edges? Because many see the big tech giants as, you know, too big to fail and also, you know, it’s so big that they can really ignore Australia.
JONES:
Look, the law of Australia doesn’t stop at the internet and we’ve got to be very firm about that. Whether it’s about the age verification laws that we passed through parliament last week. Whether it’s the stuff I’ve spoken to you about in putting obligations on social media platforms to remove scams and criminal and fraudulent content. Whether it’s the uplift we’re doing in privacy laws or whether it’s this anti‑competitive, it’s all a part of what we’re doing to ensure that the norms and laws of Australia are obeyed when multinational businesses, where they’re digital or bricks and mortar businesses, come to Australia to offer their services. We want them here, but not at any cost because we want to ensure that the laws of Australia extend to businesses operating on digital platforms. The alternative is too horrible to contemplate. As a sovereign nation, we have the right to set the laws about how people operate when they run a business in this country. It’s fair to our consumers, but it’s also critical for our own Australia based businesses so that they’re not disadvantaged, particularly small businesses.
JAYES:
What is your message to Big Tech? Would you rather them kind of do this on their own or if, you know, if this doesn’t work, would you consider a tax?
JONES:
Look, we’re looking at this sort of competition stuff quite separately to the stuff we’re doing on multinational tax avoidance. I want to pay tribute to the work my colleagues Jim Chalmers and Andrew Leigh have done in this area. The country by country tax reporting and the provisions we’ve put through parliament to prevent a lot of the profit shifting that has occurred have had a material impact. More work to be done. Ok, more work to be done in that area. But this is separate. This is about competition. This is about business to business and consumer to business behaviour and we’re serious about it.
Look, digitalisation of everything has transformed the way we live our lives and there’s so much good in that. We can communicate for a few cents to somebody on the other side of the world by video. We can do online transactions for everything from banking to shopping. Wherever we are in Australia, wherever we are in the world, we get access to goods and services from around the globe. They appear in our mailbox a few days later. These are undeniably benefits. But there is also a downside to having such a concentration of power. And no government in the world can leave that unchecked. And the Albanese government doesn’t intend to leave that unchecked. It’s a part of a program of reforms that we’re putting in place to ensure that the digital economy works for Australia and Australians and isn’t just a place where these platforms come make billions of dollars worth of profit, but don’t obey the laws of the land, that can’t stand.
JAYES:
Ok, Stephen Jones, thanks for your time. As always, I look forward to your speech.
JONES:
Good to talk.