Apple and Google hit back at ACCC's proposal for major antitrust reforms

Tech giants have given their two cents on what they think about the Australian consumer watchdog's plans to make legislative changes targeted at big tech issues.
Written by Aimee Chanthadavong, Contributor
Google Play and Apple App Store
Image: Getty Images

Apple and Google, and the Australian industry group advocating for tech giants have unsurprisingly raised concerns about the proposed measures that were outlined in the Australian Competition and Consumer Commission's (ACCC) discussion paper for the Digital Platforms Services inquiry.

In its discussion paper that was published in February, the country's competition watchdog put forward a slew of legislative measures that took aim at big tech issues, including anti-competitive conduct, bargaining imbalances, insufficient consumer and business user protections, and more.

In response to those proposals, Apple expressed its discontent, describing in its submission [PDF] that the proposed reforms would result in Australian consumers being "net worse off" and that it is "puzzled" about why the agency would "prioritise purported competition concerns", which it believes "lack cogent evidence of harm, over clear and present severe damage to users that they experience every day".

"That is not what consumers want to see as outcomes of legislative reform -- they want stronger, not weaker, protection -- from the unlawful conduct which affects the hundreds of thousands of Australians every year whose information is stolen, scammed, traded and exploited to their detriment," Apple wrote.

The Cupertino company also criticised the ACCC's reforms as being directed at addressing hypothetical, rather than existing problems, and that the changes would "regrettably" change iPhone and other Apple services, including iOS and the App Store, and result in changes to Apple's privacy and security standards and leave existing users exposed to less secure and private environments.

"Much of the discussion paper appears to proceed on the assumption that there is a relevant market failure arising from Apple's purported market power," Apple said.

"Apple does not believe that, properly examined, that assumption is correct in the wider online context in which (relevantly to Apple) app marketplaces operate.

"Indeed, app marketplaces, even the mobile segment alone, have over time since 2008 when the App Store launched in Australia been consistently characterised by higher output (including both the number of apps and app downloads) and decreasing prices (ie, lower commissions). These characteristics are indicia of healthy, competitive markets."

Google put forward similar views, warning in its submission [PDF] that introducing new legislation is "not costless".

"Improperly designed or implemented regulation can dull innovation, reduce competition, and chill investment," the search engine giant noted.

It cautioned that reform should only happen once the ACCC can demonstrate that the new rules would outweigh "potential downsides", tackle and prevent so-called unambiguous harm from a lack of competitive, and not shield firms from competition.

Google also believes that the discussion paper's proposal to ban self-preferencing when it comes to search could "deprive Australians of useful innovation".

"Consider our introduction of a thumbnail map in Search: multiple courts and authorities have validated this product improvement. But faced with an outright ban on self-preferencing, we might never have introduced that beneficial design in Australia," Google said.

"More generally, outright bans on self-preferencing, without considering justifications or harm, call into question any vertical integration, which is widely regarded as efficient. To take one example: a modern smartphone comes with multiple downstream services like email, phone, music, video, GPS, calculators and myriad other services. Blanket bans on self-preferencing would restrict a provider from introducing an integrated smartphone."

The search engine maker also raised concern about the ACCC's call for merger law reforms, where the regulatory envisages new tailored merger rules to be introduced specifically for digital platforms, pointing out that existing legislation is already capable of preventing anti-competitive acquisitions by digital platforms.   

Likewise, the Digital Industry Group Inc (DiGi), which advocates for tech giants including Meta, Google, Apple, and Twitter, has deemed a new framework for digital platform services as unnecessary.

"A singular framework -- particularly if it were to be owned by a single regulator -- would lack the depth, breadth and clarity to be suitably comprehensive in addressing consumer privacy, safety, cyber security and fair trading issues on digital platform services," said DiGi in its submission [PDF] to the ACCC.

What DiGi has instead proposed is for existing regulations to be modernised to reflect digital challenges, as well as equip government departments and regulators with resources and skills so that they can handle digital platform services.

On the flipside, Epic Games has backed the ACCC's assertion that Google and Apple have a strong hold in a number of digital platform services and that their market power within these platforms is increasingly entrenched.

"Apple and Google's market power and their resulting 'gatekeeper' positions has harmed competition, consumers, and developers," said the company, which is currently in legal battles with Apple and Google respectively, as it contends both have app store practices that are anti-competitive towards developers.

In its submission [PDF], Epic raised that requiring Apple and Google to allow alternative app stores on mobile devices would result in "a more open ecosystem that gives consumers and developers better choice and value".

It called for the ACCC to prioritise any changes that would generate competition within existing ecosystems, something in which Epic Games already exists for laptops or desktop computers, including PCs, Macs, and Chromebooks.

"It is only when consumers shift from the computer to phone, they are limited to software installation through the App Store and Play Store," Epic highlighted, noting that the impact is not just on developers, but a host of capabilities beyond gaming, including banking, health and fitness, social interactions, video chatting, and movie and television streaming.  

Microsoft has also thrown its support to address self-preferencing conduct in app markets.

"Microsoft's experience has been consistent with that of other third-party app developers that must accept the dominant app store operators' policies in order to reach users of their apps: certain of these policies either prevent us entirely from offering competitive cloud game streaming apps to mobile users, or limit services such as the use of alternative in-app purchase payment processing systems," Microsoft said in its submission [PDF].

A final report into the ACCC's big tech probe will be provided to the Treasurer by September 30. 

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