Years after launch of the Digital Platform Services Inquiry (DPSI), so-called Big Tech firms face further scrutiny after the Senate announced a second inquiry into their market share, manipulation of customers, vertical integration, and use of proprietary algorithms.
The Senate Standing Committees on Economics’ Influence of International Digital Platforms inquiry has been tasked with exploring the degree to which major multinational technology companies – Meta, Google, Microsoft, Apple, Amazon and others are implied but not explicitly named – are “exerting power and influence over markets and public debate, to the detriment of Australian democracy and users,” the committee’s terms of reference note.
This includes exploring their market share across the provision of hardware and software services; their use of vertical integration – the linking of multiple services, products and hardware – as a means of limiting users’ ability “to exercise choice”; and the way that concentrated market power affects competition, macro-economic performance, and consumer outcomes.
The inquiry will explore the transparency of proprietary algorithms used by the companies and the degree to which they “manipulate users and user responses, and contribute to greater concentrations of market power” – with an eye on the way that tighter regulations could “lead to better outcomes in the public interest”.
The wide-ranging inquiry will also explore the way Big Tech companies collect and process children’s data for profiling, behavioural advertising, or other uses, as well as evaluating the effectiveness of recent attempts to regulate international digital platforms.
Taking stock of Big Tech companies’ market impact is “overdue”, NSW Senator Andrew Bragg said as the new inquiry was announced, noting that “the major technology platforms have amassed more power than any other corporations in recent history.”
The big five Big Tech platforms, he added, “have more power than the railroads and oil tycoons of the Gilded Age…. Australia’s Parliament must form a stronger view on what the enormous concentration of power… means for our country.”
“We must have the policy settings to protect users and ensure that Australians are not being exploited by possibly the strongest corporations in history,” he said, adding that Big Tech platforms “can and should be our partners in protecting Australians and our interests.”
The new inquiry reflects growing worldwide concern that Big Tech companies have amassed too much power and, through the interconnection of complementary services, created entire ecosystems that capture, analyse, and utilise consumer data at massive scale.
The US Congress, for example, has been evaluating proposed legislation such as the Digital Platform Commission Act of 2022, which would establish a five-person federal body providing “reasonable oversight and regulation of digital platforms.”
Those platforms, lawmakers warned, “have benefited from the combination of economies of scale, network effects, and unique characteristics of the digital marketplace to achieve vast power over the economy, society, and democracy of the United States.”
“Digital platforms remain largely unregulated and are left to write their own rules without meaningful democratic input or accountability.”
Australia’s Parliament has also been scrutinising Big Tech’s market power, with the ongoing DPI launched in 2020 to canvass areas such as social media, advertising services, and other aspects of a top-heavy digital services market that is currently managed by a ‘dog’s breakfast’ of regulations.
That inquiry delivered its fifth interim report in September, and is set to continue through 2025 alongside the new Big Tech inquiry – which is currently accepting submissions and will hand down its final report on the last Parliamentary sitting day of 2023.
Last year, another inquiry focused on online harms from social media while earlier this year, a range of Australian agencies joined forces to improve scrutiny of Big Tech companies amidst claims that social media competition is actually increasing.