Reining in the digital giants: Rod Sims on the trials and triumphs of a decade as head of the consumer watchdog

Outgoing Australian Competition and Consumer Commission chair reflects on his time as consumer protector and market guardian

Rod Sims says he was “in two minds” when he met Josh Frydenberg last year to discuss seeking another term as head of the market watchdog, the Australian Competition and Consumer Commission.

Although the verdict to go was later reported as his choice, Sims, 71, says he had gone into that chat with just a few concerns about continuing. “We talked it through and we came up with a joint view”: it was time to move on.

Needing a nudge hasn’t been Sims’s style during his almost 11 years as ACCC chair, a role that officially ends 20 March. This past week, he launched a farewell tour a month early with a flurry of media interviews and a National Press Club address to highlight unfinished business.

Lawyer Gina Cass-Gottlieb, Sims’s successor, will become the first woman to head Australia’s main competition regulator since the Commissioner of Trade Practices began in 1966.

In the past decade, the ACCC has taken on new tasks, including monitoring electricity and gas markets, financial services, agriculture and digital platforms.

That five “made a big job, a very big job”, Sims says, adding, “I love the variety. I love the complexity.”

It’s a job that absorbs Sims 12 hours a day Monday to Thursday and seven to 10 hours for the other days.

One measure of his term’s success is whether Australia is a more or less competitive economy than a decade ago. “It’s a very good, tricky question,” Sims says.

“Certainly Australia has a lot of sectors where they’re very concentrated and because of that, we’re not very competitive,” he says.

“You see that when Australian companies who’ve got a very strong position in Australia go overseas and end up making a mess of it,” says Sims.

He agrees that banks often struggle while tech firms are among those more likely to be “competitively fit”.

Tougher fines have been one way the ACCC has sought to encourage business behaviour that benefits consumers, with penalties soaring from $1m to as much as $50m. Breaches can climb to 10% of a firm’s turnover.

The commission can’t take much credit for the introduction of new technology that has shaken up some industries, such as Uber’s entry into the taxi business, but its intervention – with strong support from Frydenberg – to take on the power of digital behemoths, such as Google and Facebook (now Meta), had a huge impact.

“The 2019 digital platforms survey was a good report but I never thought it would have that level of, I guess, admiration all around the world,” Sims says, listing inquiries from US and Canada, the European Union and the UK, Indonesia and Africa.

Of particular pride for Sims are the news media codes, just one of 23 key elements in the report. Forcing Google and Facebook to negotiate with media companies for use of their content has reaped more than $200m a year for publishers, Guardian Australia included.

“It has, I think, meant a lot more journalists are getting hired, a lot [fewer] journalists are getting put off,” Sims says.

However, while the media code has helped “even up the bargaining imbalance”, market information remains far from perfect. Most deals are three to five years, and Sims has tallied up the $200m-plus figure himself.

Outgoing Australian Competition and Consumer Commission chair Rod Sims addresses the National Press Club
Outgoing Australian Competition and Consumer Commission chair Rod Sims addresses the National Press Club: ‘It’s a very big job … I love the complexity.’ Photograph: Lukas Coch/AAP

“How do I know the numbers? Just by talking to chief executives at different times; sometimes just judging the mood, and putting some parameters around it,” he says. “[It’s] very much a personal calculation but I’m certain I’m right.”

He’s less sure about why Facebook continues to resist sharing their spoils from advertising with SBS and the Conversation. That stance “is just inexplicable”, and something Treasury will look at when it reviews the code “fairly soon”, Sims says.

The two publishers are “vitally important sources of news information”, and may lead to Facebook being “designated”. That outcome would require the US company to negotiate “with faith” or be put into arbitration, he says.

“I don’t think there’s any threat of designation sitting over Google’s head,” Sims said. “But there is with Facebook.”

For its part, Meta says it will “continue to engage with publishers” and that commercial deals were just one of the ways it “provides support” to them.

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In some ways, it would be handy if the ACCC earned a commission from its success. When taking on business miscreants, staff are typically paid far less – sometimes half – of what their adversaries make. Stopping the gamekeepers from joining the poachers can be a challenge.

“We try to make up for that with good quality work and a lovely working environment and so far that’s sort of working,” Sims says.

On other matters, the behaviour gas producers have exhibited in misleading state and federal governments over the effects of sucking up east Australian gas for LNG exports remains a sore spot.

“If you’re confronted by companies wanting to invest $20bn in a project and they say they have the gas, and they say it won’t affect domestic prices, it’s just hard to say ‘no’,” Sim said.

By building three of those huge LNG export trains when they had only secured enough gas for two, producers ended up more than doubling domestic gas prices. (Subsequent reports suggest the cost to the wider economy were significant.)

“The companies are also liable because some of their executives told governments that domestic prices wouldn’t increase,” Sims says. “That was clearly wrong.”

More lately, ACCC reports have called for additional onshore gas production, arguing extra supply would push down prices. That’s because once the LNG export plants are at capacity, producers can’t export more and “the link with the overseas markets is broken”, he says.

Sims doesn’t intend to fade into the regulatory sunset. He plans to write “a decent article” about the news media bargaining codes, and “think about international issues facing antitrust”.

He also has links to a London-based competition policy research network, for which he will chair its steering committee, and he’s hoping to land a university perch in Australia, although nothing is settled.

There might even be spare time to cheer on his AFL team Hawthorn and catch up with friends.

“It would be nice not to have me working so many hours,” Sims says. “So if somebody says ‘come for a visit’, you actually can.”


Peter Hannam

The GuardianTramp

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