ACCC Chairman Warns Tech Start-Up Buyouts May Become Regulated
The chairman of the ACCC Rod Sims has suggested changes to legislation could be used to allow the regulator to oversee acquisitions of tech start-ups by larger companies.
Increased regulation of buyouts would be used to prevent companies such as Google and Facebook from acquiring start-ups that could potentially challenge them in the future, leading to a decrease in competition and an increase in market share for big tech companies, said Mr Sims.
However, some members of the tech start-up community have raised concerns over legislative changes, including whether they may be prevented from selling their own firms due to the potential increased regulation.
Mr Sims told the Australian Financial Review that existing rules prevent the ACCC from considering trends in acquisitions, such as the buy-outs of tech start-ups by major Australian companies, particularly from those related to the banking, insurance and professional services sectors.
“We need to take a view on whether this sort of activity is taking out future competition and entrenching the incumbent,” Mr Sims told the AFR.
“If we see three or four acquisitions over three or four years that are problematic, and we can’t get at them individually then maybe we need law change, but that is very difficult stuff to achieve.”
Mr Sims noted he did not expect changes to happen immediately, but instead was seeking feedback and discussion on how to best deal with the situation.