Australia’s competition regulator flags legal cases against tech companies over ads | Australian Competition and Consumer Commission (ACCC)

Competition regulator Rod Sims has foreshadowed possible further legal cases against tech groups as a result of inquiries into mobile phone app stores and how ads are sold online.

The Australian Competition and Consumer Commission, which Sims chairs, has been investigating so-called “ad tech”, where search engine Google is a major player, and the stores both Google and competitor Apple use to sell mobile phone apps, as part of its broader agenda to examine the power of tech companies.

Sims handed a report detailing the findings of his inquiry into ad tech to the treasurer, Josh Frydenberg, on 31 December, and the government is expected to release it before the end of the month.

Sims was asked about the potential consequences of the two inquiries during an interview broadcast online by Reuters on Tuesday.

“There may be some competition law cases or consumer law cases that may follow our work,” he said.

“But essentially I think the real value add will be just painting a picture of how these things work and what likely harms are.”

Google last year welcomed the ad tech inquiry, saying in a submission to the ACCC that it and other competition regulators had “long recognised that vertical integration typically promotes competition and often has pro-competitive impacts”. It also defended the transparency of its market.

The ACCC’s inquiries often lead to the regulator discovering circumstances over which it launches legal action. Sims did not name any particular companies the regulator may pursue.

In December, it took Facebook to the federal court, alleging the social media company misled consumers who downloaded an app called Onavo Protect from it.

Onavo was billed as providing privacy and protecting user data, but the ACCC alleges that Facebook actually used it to harvest detailed personal information that the company then used for market research.

The app is now obsolete. It was deleted from Apple’s app store in 2018, reportedly for violating the store’s privacy policies.

The ACCC became aware of the alleged misuse of Onavo as a result of its wide-ranging digital platforms inquiry into the impact of tech companies on journalism, consumers, advertising and other issues, which were reported in 2019.

Two cases against Google, over the use of location data and ad service Doubleclick, are also on foot.

During his appearance at the Reuters conference, Sims also defended the model he recommended government require platforms use in negotiations with media companies over payments for the use of news content.

The tech companies are vehemently opposed to the “final offer arbitration” model, also known as “baseball arbitration” due to its use in the US major league.

Under the model, each side makes a single, binding offer, and the arbitrator picks one.

Sims said arbitration was necessary due to the power imbalance between media companies and the tech groups.

“Their idea of a negotiation is, you take what we give you,” he said.

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