Last Friday the Australian Competition & Consumer Commission (ACCC) released its 5th report of the Digital Platform Services Inquiry. The much anticipated report deals with the competition and consumer issues raised in the Digital Platform Services Inquiry, the Digital Advertising Services Inquiry (2020-2021) and the Digital Platform Inquiry (2017-2019).
Digital platforms are online spaces for the exchange of information, goods and services between the producers, its customers and the larger community (Digital Platforms). Digital Platforms range from social media platforms like Instagram, e-commerce marketplaces like Alibaba and Airbnb and discussion threads like Reddit. While the report clearly acknowledges the value that Digital Platforms bring to consumers and businesses, the focus of this report is on the significant consumer and competition harm associated with the use of digital platforms and the protections needed to prevent them. The approach suggested by the ACCC is multifaceted – it builds on the existing consumer protections and competition laws, but further pushes for industry specific codes and safeguards to address the complexity of the Digital Platforms market.
The ACCC makes five key proposals:
From a regulatory perspective, the ACCC is clearly seeking to align the Digital Platform services industry with other Australian industries and is renewing its push for an economy wide ban on unfair trade practices. On a global scale, the proposed consumer protection and competition measures would align the Australian Digital Platforms industry with laws already in place in other jurisdictions, including the most recently introduced EU Digital Services Act and Digital Markets Act. The proposals also clearly evidence the ACCC’s frustration with having to test the somewhat broadly drafted ACL in the Courts against the nuances of complex algorithms, and reflects its desire to get on the front-foot with prospectively drafted legislation to address the specific characteristics of various Digital Platforms.
While the proposed laws should not come as a surprise for the global players, Australian businesses operating in the industry may also be impacted (either directly or by way of a trickledown effect), and should take note of the changes. In our view, protecting users from scams, fake reviews and unfair trade practices may soon be mandatorily regulated, but nonetheless, the output from this Digital Platforms Inquiry to date confirms that a review of all aspects of user interactions, business conduct and service contracts in Australia is warranted and arguably overdue.
David Smith, Partner
Sinead Lynch, Partner (Foreign Qualified, not admitted to practice in Australia)
Adam Walker, Special Counsel
Freya vom Bauer, Associate