Justified Regulatory Reform in Antitrust Requires Cost-Benefit Analysis: Global Antitrust Institute Comment to the Australian Treasury on the Australian Competition & Consumer Commission's Digital Platform Services Inquiry, Interim Report No. 5 (Regulatory Reform)

Abstract

The Australian Competition & Consumer Commission (ACCC) released its Digital Platform Services Inquiry, Interim Report No. 5 (Regulatory Reform) in September 2022. In December 2022, the Australian Treasury requested comments on the report. The ACCC Report recommends, inter alia, several far-reaching regulatory proposals focused on competition policy—namely, placing “targeted obligations” on a wide range of conduct by “Designated Digital Platforms.” The recommended “targeted obligations” would cover conduct including self-preferencing, tying, exclusive agreements, use of defaults, platform design, interoperability, data portability, “unfair” terms of service, and price parity clauses. The Global Antitrust Institute's submission addresses the broader policy question of what the proper justification should be for implementing new competition regulations. In doing so, the comment highlights the emerging economic literature on the impact of the EU’s GDPR, which illustrates that competition regulations can be multi-faceted and place real burdens on market participants. Further, the comment addresses specific practices that the report targets for reform—that is, self-preferencing, the use of pre-installed software and defaults, and interoperability. We find that the report tends to be more concerned with the welfare of rivals than consumers.

Keywords: digital platforms, targeted obligations, regulation, self-preferencing, defaults, interoperability, cost-benefit analysis, ACCC, GDPR

JEL Classification: K21, L12, L24, L40, L41, L42, L43, L51