Overview: horizontal agreements in Australia

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Horizontal agreements

Special rules and exemptions

Do special rules or exemptions apply to the assessment of anti-competitive agreements between competitors in digital markets in your jurisdiction?

In Australia, businesses can apply to the Australian Competition and Consumer Commission (ACCC) for permission to engage in anti-competitive agreements or behavior between competitors or notification for small business collective bargaining, exclusivity and resale price maintenance, which applies to all sectors, including digital marketplaces. .

No specific rules or exemptions apply to digital marketplaces. The authorization process has been used in the past for agreements between competitors acquiring or providing services in digital marketplaces. For example, in 2021 the ACCC granted permissions (AA1000551-1 and AA1000565-1) to members of Country Press Australia (a collection of independent regional and local newspapers) and Commercial Radio Australia (a national association of radio industry) to bargain collectively with Facebook and Google regarding payments for the production of content featured on these platforms. The authorization process has also been used by:

  • a series of banks to collectively bargain and boycott with Apple over access to the Near Field Communication (NFC) controller built into Apple’s iPhone (A91546 and A91547 filed in 2016 but denied in 2017);
  • a joint venture of industry and the Reserve Bank of Australia for the suspension and termination provisions of the new payment platform regulations governing a new open access real-time payment infrastructure in Australia (A91560, A91562 and AA1000601-1 filed in 2016, granted in 2017 and reinstated authorized in 2022); and
  • ihail Pty Ltd, a joint venture between a number of taxi companies and other participants, to launch the smartphone taxi booking application “ihail” (A91501 filed in 2015 and granted in 2016).

Access to online platforms

How has the competition authority in your jurisdiction dealt with horizontal restrictions on access to online platforms?

There are no specific rules or regulations regarding horizontal restrictions on access to online platforms in Australia. These agreements are subject to the general competition prohibitions under the Competition and Consumer Act 2010.

The ACCC’s Digital Platforms Inquiry 2017-2019 (DPI) report found that agreements prohibiting competitors’ access to data, restrictions on user behavior that may prevent links to competing platforms or other exclusionary behavior that is being investigated by other regulators around the world are examples of abuse of market power by online platforms.

Although the ACCC has not yet taken action against online platforms dealing with such conduct, third party actions are ongoing regarding horizontal access restrictions. The most publicized cases are the two private lawsuits brought by Epic Games against Apple in November 2020 and Google in March 2021, in which Epic alleges abuse of market power by the two platforms for a series of behaviors that allegedly hinder its ability to provide its popular Fortnite game on the platforms. In 2022, separate class action lawsuits were also filed against Apple and Google alleging they engaged in anti-competitive behavior in the operation of their respective app stores, which resulted in consumers being paid inflated commissions on certain apps and in-app purchases. For another example, see Dialogue Consulting against Facebook (filed April 11, 2019). The ACCC also said it was investigating Apple over its refusal to offer competing mobile wallets access to its NFC chip on Apple mobile devices while reserving contactless and contactless payments using NFC for its own. Apple Pay mobile wallet.

Algorithms

Has the competition authority in your jurisdiction considered the application of competition law to the use of algorithms, in particular algorithmic pricing?

The ACCC has not taken any public action against any company alleging a violation of competition laws due to algorithmic pricing (including any action involving two algorithms coordinating pricing without human intervention).

However, the ACCC’s approach following the DPI and with its new Digital Platforms Directorate, is to focus on proactive monitoring and enforcement of potentially anti-competitive behavior associated with the use of algorithms (e.g. , anti-competitive self-preference), so it is likely that there will be more activity in this area in the near future. In its fourth Digital Platform Services Inquiry 2020-2025 (DPSI) Interim Report, the ACCC raised concerns about online marketplaces using algorithms to decide how products are categorized and displayed, including including self-preference of their own products. The ACCC also raised concerns about algorithmic transparency in its AdTech survey and in the DPSI’s second interim report. Consistent with this objective, the mandatory news media and digital platform trading code requires Google and Facebook to notify all news companies in advance of algorithm changes that will result in identified changes to content distribution. with a significant effect on the news media company’s referral traffic.

More recently, the ACCC also filed charges against Uber, which admitted breaching Australian consumer law by making false or misleading statements in cancellation warning messages and UberTaxi fare estimates. The parties have agreed to make joint submissions with the ACCC to the Federal Court seeking penalties totaling A$26 million. The ACCC found that Uber used algorithms to power its UberTaxi ride option available to Sydney-based app users, resulting in misleading estimated costs of a taxi service.

Data collection and sharing

Has the competition authority in your jurisdiction considered the application of competition law to “hub-and-spoke” information exchanges or data collection in the context of digital markets?

In 2017, the Competition and Consumer Act was amended to introduce a ban on concerted practices which have as their object or are likely to have the effect of substantially lessening competition.

Since the introduction of the provision, the ACCC has taken only one enforcement action, in 2019, alleging concerted anti-competitive practices. The conduct of ANZ Roofing Pty Ltd and Ivy Contractors Pty Ltd involved social media posts and ‘likes’ on setting minimum rates for repairing hail-damaged homes. The case did not result in any legal action. No action has been taken on digital markets.

Other issues

Have any other key issues emerged in your jurisdiction regarding the application of competition law to horizontal agreements in digital markets?

On December 14, 2016, the ACCC won its appeal to the High Court of Australia against Flight Center (a travel agency). In ACCC vs. Flight Center [2016], the ACCC alleged that Flight Center engaged in attempted price fixing by attempting to induce three airlines to enter into a contract, arrangement or agreement to fix, control or maintain the prices offered by the airlines airlines via their own direct online channels and prices made available to Flight Center. The High Court has held that where an agent exercises discretion in fixing the prices of the principal’s goods or services and the agent is not obliged to act in the interests of the principal, it may mean that the principal and the agent are in competition with each other. This decision potentially expands the scope of the supplier-distributor relationship to such an extent that certain aspects of supply relationships, typically considered vertical arrangements, may be considered horizontal in nature.

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