ACCC calls for feedback on new rules and regulations for large digital players

Latest Digital Platform Services Inquiry discussion paper explores what rules, access regimes, codes of conduct and legislative reforms are needed to curb digital platform gians

The Australian Competition and Consumer Commission (ACCC) is seeking feedback on a new discussion paper looking at legislative reforms, rules, codes of conduct and access regimes that could directly address the market dominance of digital platform giants.

The latest discussion paper is the fifth in a series of reports produced under the ACCC’s Digital Platform Services Inquiry, a five-year program that kicked off in 2020. This was the result of an initial Digital Platforms Inquiry into the power Google and Meta (Facebook) in particular possess across Australia’s digital ecosystem conducted between 2017-2019.

Digital Platform Services Inquiry Interim Report No 5 offers up numerous options for how to address harms to consumers, businesses and competition identified as areas dominated by the digital platform players across social media to adtech, search, online retail and app marketplaces. The ACCC said these potential measures are being put up for review as part of a new regulatory framework aimed at promoting better competition and growth in the digital services space and an investigation of whether Australia’s current competition and consumer laws, including merger laws, are up to the job.

Suggestions include measures to address anti-competitive conduct that preference one platform’s services above those of business users; barriers to entry, such as access to consumer data; bargaining imbalances; addressing data advantages; and insufficient consumer and business user protections such as effective dispute resolution process.

On the consumer side, the paper also looks at ways to improve consumer protection such as obligations on platforms to better deal with online scams, restrictions on conduct that can harm consumers. As well as the original and subsequent Digital Services Platform Inquiry, ACCC said suggestions had been informed by the Digital Advertising Services Inquiry.

In calling for feedback to the latest discussion paper, ACCC outgoing chair, Rod Sims, noted the regulatory watchdog had reached the half-way point in its five-year remit to initiate action after the Digital Platform Services Inquiry.

“Now is the time to consider whether further reforms are needed to supplement the important tools in Australia’s competition and consumer law to maintain a vibrant digital economy that drives innovation and enhances productivity,” Sims said. “There is momentum building internationally, with authorities and lawmakers around the world taking action to address the competition and consumer harms arising on digital platforms.

“These platforms hold powerful positions in the economy and society and can often dictate terms to businesses that use their services. This in turn can harm consumers and the small businesses that rely on them, including through higher prices, greater use of personal data, reduced choice, less innovation or lower quality products.”

Sims pointed out that since the ACCC commenced its initial investigations into digital platform services, the big players – Google, Apple and Meta – had continued to grow and expand their impact and influence both in terms of commercial as well as consumer lives. While this trio are of most concern, the paper does highlight Microsoft and Amazon on its list of large digital platform players of interest.

“It is clear that large digital platforms are often protected by high barriers to entry and expansion, and in some cases, they have become ‘gatekeepers’, acting as critical intermediaries between businesses and consumers, and controlling access to consumers,” Sims continued. “We are looking at whether we need additional laws or reform to make the online environment fairer for businesses and safer for consumers.”

In the paper itself, the ACCC also points to new services and products, such as augmented and virtual reality, raising fresh concerns they could exacerbate existing harms. The watchdog noted such services facilitate greater personal data collection and provide greater opportunities for consumers to be manipulated via ‘dark patterns’ (user interfaces and architecture), which could encourage them to make decisions about options or features that may not be in their best interests.

The ACCC said it’s not yet determined on any recommendations and hopes to gauge feedback from industry as well as consumers before making final decisions. It is also looking at international moves and other jurisdictional restrictions that have been gathering support, such as what’s being proposed in the UK, Europe, the US and Asia-Pacific.

“While our key objective is to ensure any reform is appropriate for Australia, we recognise the benefits to all stakeholders of international alignment in this important area,” Sims said.

He also pointed to the News Media Bargaining Code, which was legislated by the Australian Government in February 2021, as a great example of how regulatory change “can quickly and effectively address the consequences of the largest platform’s market power”. Since the introduction of the code, both Google and Meta have come up with voluntary commercial deals with an array of Australian news media businesses.

Feedback on discussion paper No 5 is due in by 1 April 2022. The report is due to be tabled by 30 September 2022.

Previous reports tabled by the ACCC’s Digital Platforms Branch include one on search, social media and online private messaging services (October 2020), app marketplaces (April 2021), Web browsers and general search platforms (October 2021). The latest on online retail marketplaces is due to hit the Treasurer’s desk by 31 March 2022.

In complement, the ACCC has run an inquiry into the supply of digital advertising services and tabled a final report on 28 September 2021.

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