There was the digital platforms’ inquiry, which raised concerns about an imbalance of bargaining power among Facebook, Google and news publishers, for whom, the regulator argued, the platforms were unavoidable. That led to Australia’s landmark media bargaining code and unprecedented news-content licensing agreements.
Then Sims’ willingness to use competition and consumer law to go after Big Tech attracted headlines around the world.
But if there’s one part of his legacy that Sims wants to talk about in his exit interview with FTCWatch, it’s both the need for antitrust agencies around the globe to work together and what he believes is his agency’s success in doing just that.
“Just as digital platforms are transnational … I think competition agencies need to work in a transnational way as well,” Sims said. “I think that’s really important. Each country just looking inwards at itself is not going to deal with these issues.”
“Competition agencies will be much more powerful if we work together, and if we do some merger investigations and some merger analysis in a similar timeframe, so that we really are completely joined up,” he said in an interview ahead of his departure from the top job later this month.
Federal Trade Commission Chair Lina Khan appears to be on the same page. She told a recent online conference, attended by Sims, that the global presence of many technology companies meant that “enhancing international coordination and cooperation, and working together very closely, is paramount.”
There’s a reason why these comments appear to go beyond the let’s-work-together platitudes you’d expect from top antitrust officials. Both Sims and Khan know that, with parallel investigations and lawsuits now underway on both sides of the Pacific Ocean, the closer relationship between the FTC and the Australian Competition & Consumer Commission, or ACCC, is already paying dividends.
Australian officials have confirmed in court hearings that they’re keeping tabs on documents being lodged in US lawsuits and are feeding that information into their own enforcement action against the tech giants. Meanwhile, the Americans are increasingly looking to Australia to shed light on their own cases.
The cross-pollination has left US-based tech giants facing the unpleasant prospect of having to fight similar legal battles in multiple jurisdictions, with local enforcers’ firepower bolstered by the pooling of investigative resources with foreign counterparts. And that’s music to the ears of Sims.
“I mean, we’re not going to align our arrangements so that there’ll be identical legislation,” Sims said in an interview. “But we want to make sure we’re not contradicting each other, that we can each move on similar issues in similar ways, even if our legislative frameworks are a bit different.”
Yet, observers know that the transnational regulatory pincer movement facing Big Tech has as much to do with Australian judges as it does with improved information flows between the ACCC and the FTC.
Both Meta Platforms and Google have fought tooth and nail to have legal action in Australia moved to a US court in California. But Australian federal judges have consistently rejected those requests, arguing that violations of local competition and consumer laws must be dealt with locally — no matter what contractual arrangements the tech companies may have in place.
While not being drawn on recent court decisions, Khan responded to FTCWatch’s questions about Australian judges’ forceful claim to legal sovereignty by saying that it was “important for enforcers around the world to be able to assert their law enforcement over their jurisdictions.”
And at least from the Australian side of the Pacific, the ACCC’s intention to capitalize on information sharing with its US counterparts appears to be firming up and will be unlikely to change under the leadership of Gina Cass-Gottlieb, who will take the helm at the regulator when Sims leaves.
Jurisdictional fight
The clash between Meta and Australian startup Dialogue offers the best illustration of how the jurisdictional fight is being fought — and lost — by Big Tech.
Melbourne-based Dialogue offers a scheduling service for companies that use Facebook or Meta’s Instagram to communicate with potential and existing customers. For a fee, a service called Sked Social will curate a company’s content and ensure that it appears at the right time.
According to Dialogue’s 2020 filings in the Federal Court of Australia, it was only when Meta started to consider offering similar scheduling services that it decided to clamp down on Sked Social, saying the service had violated its contractual obligations.
The Australian judges weren’t buying those arguments. They ruled that local competition laws trumped any terms of service that Dialogue may have signed up to; They also rejected Meta’s claims that its platforms were based in the US, rather than Australia.
The decision by the court’s appeal panel would have come as a relief to Dialogue, which is continuing to operate under a court injunction forcing Meta to grant Sked Social staff access to both Facebook and Instagram. But the ruling wasn’t a bolt out of the blue.
The Dialogue decision was the fourth time in recent months that the Federal Court had rejected attempts by US-based tech giants to shut down local lawsuits by invoking jurisdictional arguments. The judges’ position appears to be solidifying.
Meta recently filed its application with Australia’s top court to challenge a Federal Court decision to include Meta in a privacy lawsuit over the Cambridge Analytica data breach. Meta said the legal action should be limited to Facebook Ireland, which runs the social-media giant’s Australian operations.
The Australian courts’ stance on issues of jurisdiction was followed by Big Tech’s overhaul of its contractual arrangements with platform users — a move that appeared designed to force all disputes back to a Californian court.
As reported by FTCWatch’s sister publication MLex in January, Google’s revamp of its terms of service with users was designed to cap its liability for contractual violations at $200, in most cases. Apple, Amazon, Microsoft, Twitter, Yelp, TikTok and Meta all adopted similar contracts.
More importantly, though, the overhaul was accompanied by wording on where disputes should be resolved. The platforms’ hope is that contractual disputes will be seen as just that — disagreements over the terms of a contract, which can be dealt with in California.
For example, Google’s terms of service now say that “California law will govern disputes,” and that these are to be resolved “exclusively in the federal or state courts of Santa Clara County, California, USA.”
These strengthened terms of use are likely to be invoked when, as is expected, the ACCC’s antitrust probe into Google’s decision to kick Australian ad startup Unlockd off its Android app store ends up in a local court.
‘Crucial information’
The increased information between the ACCC and the FTC, along with the flow of information between parallel lawsuits in Australia and the US, are arguably the most significant developments in Sims’ 11-year tenure as chair of the ACCC.
The impact of these developments became apparent in December 2020, when the Australian enforcer filed a Federal Court consumer lawsuit against Facebook, as Meta was called at the time. The ACCC alleged the social-media giant had misled users by promising that its Onavo Protect app would keep their online activity private.
This lawsuit was lodged just months after the FTC and the Department of Justice signed an intelligence-sharing deal with their counterparts in Australia, Canada, New Zealand and the United Kingdom — an agreement designed to cover precisely this type of information exchange.
What soon became apparent was that the ACCC was incorporating material gleaned from two New York-based lawsuits against Facebook, led by the FTC and a coalition of 48 state attorneys general. Those lawsuits were also filed in December 2020.
“What’s interesting about the FTC’s action is that they cite the Onavo Protect product as giving Facebook crucial information to enable Facebook to work out which companies they may like to acquire, such as WhatsApp and Instagram,” Sims told MLex at the time.
The ACCC told the Federal Court that Meta used personal-activity data from the Onavo Protect app to identify competitors, overlaps between apps and shifts in consumer attention.
Although acknowledging that the two proceedings were linked, Sims pointed out that while the FTC had pursued Meta on competition grounds, the ACCC had focused on alleged consumer-law violations.
Sims also said whereas the lawsuits were announced within the same month, the ACCC had been investigating its consumer-related concerns for a year before bringing its legal action against Meta.
There are also early signs that Big Tech may attempt to undermine the relationship between the FTC and ACCC — in the Dialogue case, Meta lawyers warned that the Australian courts’ interest in the case posed an “unacceptable risk” to an earlier privacy settlement between Facebook and the FTC.
So far, the cooperation appears to be working and may become an initial step toward even tighter transnational enforcement arrangements targeting tech companies.
“It’s very much about alignment, and I think the alignment amongst competition agencies at the moment has never been higher,” Sims told FTCWatch. “And we’re very pleased with that and pleased to be part of that.”