The Framework

Under Australia’s proposed single-firm conduct framework, digital platforms above certain revenue or user-count thresholds would face prescriptive ex ante rules designed to counteract behaviors such as self-preferencing, tying, and restricting interoperability. These presumptions of harm bypass the usual case-by-case analyses that competition laws ordinarily require, and they impose up-front obligations without necessarily proving actual market failures. Moreover, platform providers would also be compelled to share various functionalities or data with third parties, which regulators argue helps smaller firms compete—but which can also impose significant compliance and technical costs. Because designation hinges on broad quantitative criteria rather than rigorous determinations of market power or harm, even platforms whose business practices yield net benefits to users or partners may be swept up. Platforms can apply for exemptions, but the bar is set much higher than under traditional competition law—meaning many will likely remain subject to burdensome obligations by default.[1]

Implications for U.S. Technology Companies

Most big digital platforms are American, so Australia’s single-firm conduct regulation would disproportionately impose regulatory overhead and rigid obligations on them. Because major U.S. platforms typically operate at a global scale, they may respond by putting Australia on a slower product-release cycle to ensure compliance before launching new features. These delays impede the competitiveness of American businesses that rely on these platforms to reach Australian customers, creating an uneven global playing field.

How China Benefits

By saddling big U.S. companies with stiff new obligations and costs in Australia, the regulation inadvertently creates an opening for Chinese firms. Chinese tech providers—often backed by substantial government support—could more readily fill any innovation gaps or enter market niches left under-served by U.S. companies coping with new mandates. As Australia’s rules diminish the competitiveness of U.S. platforms, Chinese competitors may seize the chance to expand, leveraging their domestic base and sometimes-lower regulatory costs. In essence, weakening U.S. market leaders abroad allows Chinese firms to accumulate global market share, deepen their technological capabilities, and challenge American firms’ historical dominance.

Endnotes