Australia proposed a bill on Monday that could impose fines of up to A$50 million ($33 million) on global technology corporations if they stifle competition and impede consumers from switching between services.
TakeAway Points:
- Australia proposed a law on Monday that could impose fines of up to A$50 million ($33 million) on global technology companies if they suppress competition and prevent consumers from switching between services.
- The proposed law empowers Australia’s competition regulator to oversee compliance, investigate anti-competitive practices online and fine companies.
- According to a filing on Monday, Kioxia, a chipmaker funded by Bain Capital, has set a preliminary price range of 1,390 to 1,520 yen ($9.22 to $10.09) per share for its IPO.
Fine for online competition
The centre-left Labor government has targeted Big Tech’s influence, and parliament passed a law last week that banned social media for children aged under 16.
The proposed law would empower Australia’s competition regulator to oversee compliance, investigate anti-competitive practices online and fine companies, Assistant Treasurer Stephen Jones said in excerpts of a speech due later on Monday.
“The digital economy challenges our current legal framework,” Jones said in the speech at the public policy research McKell Institute in Sydney.
“The dominant platforms can charge higher costs, reduce choice, and use sneaky tactics to lock consumers into using certain products. Innovation outside of the established players becomes almost impossible.”
Apple, Google, and Meta, which dominate app downloads and ad revenues, did not immediately respond when approached for comment on the proposed law.
The consultation process is scheduled to end on Feb. 14 and more discussions will be done to prepare the draft legislation.
The planned law, similar to the European Union’s Digital Markets Act legislation, could make it easier for people to move among competing services, such as social media platforms, internet browsers, and app stores.
Based on advice from the Australian Competition and Consumer Commission, the government can pick platforms that pose the greatest risk of hurting competition.
“Initially, we will look to prioritise app marketplaces and ad tech services for service-specific obligations,” Jones will say.
The bill’s specific obligation
These specific obligations would restrict companies from pushing their apps with low user ratings to the top of their search list and prevent providing favourable treatment to their own services, compared with third parties.
A competition commission report on digital platform services in 2022 showed Google controlled 93% to 95% of online search services in Australia, while Apple’s App Store accounted for about 60% of app downloads and Google Play Store 40%.
Meta Platforms’ Facebook and Instagram together supplied 79% of social media services in the country.
Bain-backed Kioxia sets price range for December IPO
Bain Capital-backed chipmaker Kioxia has set a tentative price range of 1,390 to 1,520 yen ($9.22 to $10.09) per share for its initial public offering, a filing showed on Monday.
The price range, which was first reported by Reuters, compares with an indicative price of 1,390 yen set in November and gives the Japanese chipmaker a market value of around 749 billion yen to 819 billion yen.
Bain scrapped plans for an IPO of Kioxia in October after investors sought a market value of around 800 billion yen compared to its target of 1.5 trillion yen, Reuters has reported.
The buyout firm postponed a previous IPO plan for Kioxia four years ago.
Bain’s efforts to list the chipmaker are being closely watched as a test case for buyout firms in Japan, where more companies are selling non-core assets or going private.
Going public would offer Kioxia fundraising options in a capital intensive industry but increase scrutiny on the company’s financials.
A Bain-led consortium acquired the chipmaker from scandal-hit conglomerate Toshiba for 2 trillion yen in 2018.
Kioxia is due to debut on the Tokyo Stock Exchange on Dec. 18.
