Google

2 February 2021

In recent weeks Google made an explicit threat to deny service to Australians if this parliament passes the media bargaining code. It is an outrageous threat for a business to make against parliament. It is pathetic and desperate but hardly surprising, because what Australia proposes terrifies them and may inspire other countries to follow suit.

This isn't the first time powerful monopolies have tried to intimidate parliaments and people. For example, 150 years ago, in the age of the robber barons, industries were dominated by monopolies and their ruthless owners. Their names are still familiar to some of us today—Carnegie, Ford, Rockefeller, Vanderbilt. Each of these men turned a business into a cartel and a monopoly. They used their dominance to extract wealth from their customers and their communities. Each of these men became unimaginably wealthy and used their wealth to influence and to become powerful. Each of these men intimidated politicians to serve their personal interests rather than the public interest. They could forge these monopolies because there was no law to prevent it.

Governments needed new laws and new tools to fight the robber barons. The US got them in the Antitrust Act 1890, which prohibited anti-competitive conduct and criminalised the formation of cartels. It took many years to apply the new law and break the great monopolies, but once the tools were available it was only a matter of time. Other countries such as Australia followed suit with their own laws.

The robber barons of our time are not Standard Oil or Union Pacific; they are Google, Facebook and a number of other tech giants. They control the modern digital monopolies and exploit them ruthlessly, earning immense profits in the process. Just as with the cartels and monopolies of the past, government today lacks the right tools to fight them. Our competition policy is designed around consumers and the prices they pay. The tech giants escape this regulation because they charge individual customers nothing and extract the wealth of suppliers, particularly small business.

We need to rethink our regulatory framework to ensure that digital markets are free, fair and competitive. Until that happens, we need legislation that provides transparency about how tech giants are tracking users and profiting from the data. I intend to introduce a bill later this year to give Australians a digital right to privacy. I will say more on this in due course. I expect Google and others will continue their threats to leave Australia if such legislation is passed. I don't believe them.

Unlike the great monopolies of the past, digital dominance depends on network effects. Pulling out of Australia will create a place for startups to develop, scale and commercialise new products free from the interference of big tech. Google cannot afford to give other businesses a toehold to challenge their dominance. Theirs is an empty threat. They want to bully parliament into serving their interests rather than the public's interests. It will not work.

Before I came to this place, I had a long career in business. I have seen the benefits that private enterprise can bring to people and to communities. But those benefits only come with competition. When there is no competition, when a business becomes absolutely dominant, it stops benefiting the community and starts exploiting the community. That's what we often see today in big tech. Their immense wealth comes through exploiting the communities they supposedly serve, and, when new laws put even a fraction of that wealth at risk, they respond with bullying and with threats. It is time for this parliament to act. It is time to pass the media bargaining code, give Australians a right to digital privacy and create a digital market that is free, fair and competitive.

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