Disruptive technologies such as Uber split antitrust officials over regulators’ role

12 May 2017 11:03am

11 May 2017. By Leah Nylen.

The role of regulators in advocating for disruptive technologies such as Uber, AirBnB and mobile banking services divided competition officials from Australia, Portugal and Singapore today.

Hours after a European court opinion said EU states can regulate Uber's car-hailing business like a taxi service, a conference* in Portugal heard starkly different visions of the ideal regulatory landscape for similar innovative businesses.

Rod Sims, chairman of the Australian Competition and Consumer Commission, said disruptive technologies present great opportunities for antitrust agencies to demonstrate the value of competition.

In particular, he praised Uber for "revolutionizing" the taxi and transportation industry in Australia. "Uber has been unambiguously terrific in Australia," Sims said.

The ACCC's "role was to point out the proper benefits of competition," he said. "We simply said they are a new entrant, if people don't like it they won't use it. We stayed at a high level and really tried to create a framework … in which Uber could be accepted."

Nuno Rocha de Carvalho, a board member at the Portuguese Competition Authority, said agencies should seek to be in the forefront about discussions of changing regulations such as those that apply to ride-hailing services.

For example, Porto, the conference venue, had limited the number of taxis to 700, Carvalho said, but no one knew precisely why. Competition authorities should push other regulators to consider the rationale behind any regulation so it can be more easily adjusted to future innovations, he said.

"This disruptive technology has rendered existing regulation obsolete," Carvalho said. "It's not so much an issue of whether this regulation is wrong for Uber. It was probably wrong in the first case. It was disruption by Uber that disrupted our notion of the market."

But Toh Han Li, chief executive of the Competition Commission of Singapore, was less supportive, saying that Uber and similar apps "exploit a regulatory loophole" that should be closed.

"There may be some heresy in saying this, but I think we need more regulation," Toh said, when it comes to services such as Uber's. "The regulatory playing field is not level, and Uber has exploited that. Frankly, the solution is not to have less regulation but more regulation. There needs to be regulatory symmetry."

The debate among enforcers mirrors a similar discussion taking place across Europe and in other countries about whether to exempt disruptive technology companies from existing regulations or seek to tailor rules to better address their situation.

Earlier on Thursday, a legal opinion at the EU Court of Justice said the bloc's member states could require Uber to obtain the necessary licenses and authorizations to operate because it fell within the field of transport.

A Barcelona court had referred the question to Europe's highest court. The opinion by Advocate General Maciej Szpunar isn't binding on the court, which will issue its decision at a later date.

* International Competition Network Annual Conference 2017, Porto, Portugal, May 10-12, 2017

Joh Sung-Wook Interview