Clifford Chance

In the latest interim report published by the Australian anti-trust regulator (ACCC) as part of its ongoing inquiry into digital platform services, the ACCC recommended a number of reforms to ensure that Australian consumers and small businesses can benefit from continued competition, investment and innovation in digital platform services. 

Overview

The latest interim report published by the ACCC as part of its ongoing inquiry into digital platform services, saw the ACCC identify a number of key reform priorities including the need to protect consumers and small businesses against scams, harmful apps and fake reviews and to prevent anti-competitive self-preferencing, addressing data advantages and improving interoperability and transparency.

The ACCC also considered that enforcement of existing anti-trust laws could be reformed to better safeguard against financial losses to scams and unresolved disputes, and that this could be improved particularly where several large international jurisdictions (including those in which successful enforcement action has occurred) are already implementing competition law reforms for large digital platforms.

ACCC's recommendations

The ACCC provided four key recommendations in relation to consumer protection and the promotion of competition.

Recommendation 1: Economy-wide consumer measures

The ACCC recommended the adoption of an economy-wide prohibition against unfair trading practices to address certain business practices not currently covered under existing legislation, such as some "dark patterns" which exploit psychological or behavioural biases and limit the ability of consumers to express and act on their preferences online.

Recommendation 2: Digital platform specific consumer measures

The ACCC recommended additional targeted measures to protect users of digital platforms, including (a) mandatory processes to prevent and remove scams, harmful apps and fake reviews, (b) mandatory internal dispute resolution standards to ensure accessibility, timeliness, accountability and transparency and (c) ensuring that consumers and small businesses have access to an independent external ombuds scheme.

Recommendation 3: Additional competition measures for digital platforms

The ACCC recommended the introduction of additional competition measures to protect and promote competition in markets for digital platforms, including through a new power to make specific mandatory codes of conduct for each type of digital platform service.  The objective is to enable flexibility to tailor the obligations to the specific competition issues relevant to that service as those change over time.

Recommendation 4: Targeted competition obligations

The ACCC recommended that the framework for the mandatory codes (see Recommendation 3) supports targeted obligations to address specific competition issues, such as anti-competitive self-preferencing, anti-competitive tying, impediments to consumer switching and data-related barriers to entry and expansion.

Next Steps

• In addition to these ACCC recommendations, the ACCC noted that there is considerable benefit in developing new competition measures that align with new obligations in jurisdictions such as Europe, the United Kingdom and Japan, such that any pro-competitive changes implemented overseas could be rolled out in Australia to benefit Australian consumers and businesses.
• The Australian government has already initiated a public consultation process to seek views from the public (including consumers, businesses, and any other stakeholders) on the ACCC's recommendations and any associated regulatory reform.  Submissions are due by 15 February 2023.  

The ACCC is expected to publish its next interim report as part of the ongoing digital platform services inquiry by 31 March 2023.  That interim report is expected to outline the ACCC's assessment of:

• the degree of competition between social media services
• trends in mergers and acquisitions by social media platforms and the effect of these activities on competition
• the role of advertising services 
• any prevalence of scams and misleading or deceptive content in social media services.