Australian Competition & Consumer Commission calls for new competition and consumer laws for digital platforms

November 29, 2022

On 10 February 2020, the Australian Government directed the ACCC’s Digital Platforms Brance to conduct a five-year inquiry into markets for the supply of digital platform services in Australia and their impacts on competition and consumers.

The fifth report of the inquiry has now been published. It has proposed that platforms be subject to mandatory dispute resolution processes and stronger requirements for combating scams, harmful apps and fake reviews, among other measures.

The Report has also proposed mandatory codes of conduct for certain platforms and services to protect and promote competition.

In addition to consumer and competition specific recommendations for digital platforms, the report also reiterates the ACCC’s support for a new economy-wide unfair trading practices prohibition.

Consumer issues and recommendations

The report says that the ACCC and other agencies have observed a significant and sustained increase in scams on digital platforms targeting consumers, including those experiencing vulnerability. In addition, consumers have experienced harms from inappropriate and fraudulent apps made available on app stores, as well as from fake reviews and review manipulation.

The ACCC’s report recommends new laws that require digital platforms to:

  • provide user-friendly processes for reporting scams, harmful apps, and fake reviews, and to respond to such reports;
  • reduce the risk of scams by verifying certain business users such as advertisers, app developers and merchants;
  • publish review verification processes to provide important information to readers of online reviews to help them assess the reliability of reviews on the platform;
  • report on scams, harmful apps and fake reviews on their services, and the measures taken to address them; and
  • ensure consumers and small businesses can access appropriate dispute resolution, supported by the establishment of a new digital platform ombuds scheme.

Competition issues and recommendations

The report says that without effective regulation large digital platforms have the ability and incentive to engage in conduct that is harmful to competition. This can include preferencing their own services, or imposing tying arrangements where users of a digital product or service are pushed or compelled to use another service or product, such as smart phones pre-loaded with a certain bundle of apps. These poor competition outcomes harm consumers and business users.

The ACCC recommends a new regulatory regime to work alongside Australia’s existing competition laws that would address anti-competitive conduct, unfair treatment of business users and barriers to entry and expansion by potential rivals.

Service-specific codes of conduct could include targeted obligations to:

  • prevent anti-competitive self-preferencing, tying and exclusive pre-installation arrangements;
  • address data advantages;
  • ensure fair treatment of business users; and
  • improve switching, interoperability and transparency.

The report references the fact that similar reforms are already happening overseas. These include the EU’s Digital Services Act and Digital Markets Act, the UK’s proposed pro-competition regime for digital markets, and Japan’s Act on Improving Transparency and Fairness of Digital Platforms.