Opinion
Why CBA’s Comyn wants a fight with big tech
The Commonwealth Bank boss is defending the contribution of large Australian companies and criticising the easy ride of big tech giants.
Jennifer HewettColumnistAs CEO of a large, very profitable Australian company, Commonwealth Bank’s Matt Comyn insists he is happy to face intense scrutiny, including from politicians,
But he still “wonders and worries” about the level of criticism levelled at Australian companies, he says, particularly large ones, and relative to much bigger global tech giants.
Companies such as Apple and Meta should be subject to more scrutiny than they are here, he argues, given their far greater revenue growth, profit margins and market power.
Commonwealth Bank chief executive Matt Comyn speaking to Jennifer Hewett on stage at The Australian Financial Review Business Summit. Oscar Colman
Instead, he says, big tech companies are “the undisputed champions of kabuki theatre” in their approach to national governments everywhere and in their unco-operative responses to parliamentary appearances or questioning in Australia.
“These are sophisticated companies who are playing a very deliberate approach and game and I think that should be, and – I am sure it is, I hope it is – a very important agenda item for both the government and policymakers in this country,” he said.
CBA’s sensitivity to Apple’s “extraordinary” statistics is, at least in part, self-serving given the tech giant’s success in the exponential growth areas of digital payments.
Comyn is also clearly keen to leverage political and media concern about the decision by Meta to quit its commitment to pay domestic news organisations about $70 million a year for content when existing deals expire this year.
Companies such as Apple and Meta should be subject to much more scrutiny than they are here, he argues, given their far greater revenue growth, profit margins and market power.
So he notes approvingly Anthony Albanese’s recent comments it is unfair for companies like Meta to benefit from others’ investment, saying this view can be applied to industries beyond media.
The obvious counter to this is the surging innovation, improved consumer experience, sophisticated data and economic growth created by American tech giants – with AI as potentially the most revolutionary development yet. Consumers have already voted en masse with their fingers.
But Comyn’s push for government policy changes affecting big tech also reflects the increasing concern among domestic chief executives that their own companies remain far more appealing and easy political targets.
Such assaults tend to come in industry cycles, usually triggered by community angst or perceptions of unjustified corporate profits in a country with several industries dominated by a few big players. Qantas under a new CEO, for example, is struggling to recover from getting the balance wrong between its customers and its shareholders.
Only a few years ago, the big banks were considered the standout villains, culminating in the Hayne royal commission in 2018. More recently, it’s been the turn of the supermarkets again as politicians attempt to demonstrate their determination to assuage voter unhappiness about inflation. Just count the number of reviews into “gouging” under way.
The standard accusation is lack of competition leading to uncompetitive prices and bad service for customers.
Comparing apples with Apple
Comyn doesn’t pretend to be an expert on supermarkets, he told The Australian Financial Review Business Summit. But he points to recent results for Coles to back his argument.
“For every hundred dollars that is spent, their net profit margin is $2.50,” he says. “If they earn zero, they go out of business. If you compare and contrast that with Apple, their net margin would be 26 per cent.”
As for the increase in earnings over the past five years from 2019, he says that one supermarket chain (Woolworths) is up around 3.5 per cent and one (Coles) is down by around the same amount.
“Apple over that time? Earnings up 75 per cent,” he declared.
He is also keen to compare CBA’s tax rate of 30.5 per cent with the tech company’s in Australia, calculating that Apple’s $12 billion in revenue and $160 million in tax paid in 2022 means its effective tax rate would be 4 per cent.
By comparison, he maintains Australia’s top 15 companies account for 42 per cent of all corporate tax paid.
Another “fun fact” he wants to emphasise is the $1 trillion worth of sales that has flowed through Apple’s App Store since it was launched in 2008.
“Apple itself describes that as an economic miracle,” he said, conceding it is a worthwhile innovation that certainly deserves to be valued.
“I think what is absolutely certain is that it is an economic miracle for shareholders, the likes of scale and persistence that we haven’t seen before,” he said. “Like the enduring nature of being able to charge that sort of margin for that period of time subject to a number of different reviews.”
Comyn clearly believes that level of margin is in unfair contrast to even some of Australia’s most profitable domestic companies.
The banks failed in their attempt back in 2015 to be allowed to bargain collectively with Apple to get access to the iPhones to make payments directly from banking apps.
The thorny issue of big tech’s power
Comyn has still continued to fight hard for greater regulation of Apple Pay and more open access to its functions for banks and regulators given the importance of the iPhone in strategic payments and economic infrastructure.
The federal government is currently making changes in parliament to the regulation of payments, supposedly giving the Reserve Bank greater powers over tech companies entering the space.
Yet how to deal with the power of big tech is a much thornier issue than the grievances of any corporate or the reach of any central bank or regulator. European attempts to rein in these US giants have had limited success so far.
Former treasurer (and Nine chairman) Peter Costello told the Summit the Australian Competition and Consumer Commission found Meta and Google were “monopolies on a global scale that would make Rockefeller blush”.
But in contrast to an era of breakthrough antitrust legislation, the US Congress has delivered little more than political theatre, kabuki or otherwise. Will Australia do any better? Can it? Should it?
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