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Australia: ACCC head warns Facebook and Google over mergers

 |  May 26, 2019

Chair of the Australian Consumer and Competition Commission (ACCC), Rod Sims, has flagged closer global scrutiny of mergers and acquisitions by digital platforms as one of the key recommendations of its digital platforms review due to be handed down next month.

The ACCC head said Facebook’s US$1 billion acquisition of Instagram in 2012 was an example of how global digital platforms shut-down threats to their market dominance by buying disruptive competitors.

“There is a growing debate, both in Australia and overseas, as to whether the process of competition for the market is adequately protected by the forward-looking substantial lessening of competition test applied to mergers,” Sims said.

“We have examined this issue in our Digital Platforms Inquiry. In our view, Google and Facebook have commercial incentives to strategically acquire nascent firms even if the chance of these firms ultimately posing a competitive threat is small.”

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