I. Introduction
We appreciate the opportunity to comment on the Australian Government’s (“Government”) consultation on the implementation of a new digital competition regime.1
As we outline in our comments, the Government’s proposal rests on the assumption that there exists a broad global consensus on the need for ex-ante rules for digital platforms. This purported consensus is, however, largely overstated. Australia should not feel pressured to “catch up” with a trend that does not exist. Second, the Government promotes ex-ante digital competition rules as “complementary” to an expanding web of regulatory interventions. In practice, however, each new regulation compounds a broader regulatory overload that threatens to result in net social losses. Third, ex-ante digital competition rules may reflect the European Union’s (“EU”) distinct industrial policies that are not necessarily suited to Australia. The EU may also be willing, for political reasons, to accept tradeoffs that Australians are not. Fourth, the Government’s focus on ad tech is misplaced. Ad tech is not the hub of anticompetitive behaviour that the Government suggests it is. Fifth, the Government should take lessons from the international experience, particularly that of the EU. As we show, the Digital Markets Act (“DMA”) has led to unintended consequences for businesses and consumers alike—reducing functionalities and limiting visibility for smaller players, such as hotels. Finally, and relatedly, the rules and conduct requirements the Government envision
