A five-year ACCC inquiry has found digital platforms needed to be subjected to targeted regulation to increase competitiveness and protect consumers.
Australian Competition and Consumer Commission (ACCC) Chair Gina Cass-Gottlieb said without sufficient laws in place, Australian consumers and businesses continued to encounter a significant number of harmful practices across a range of digital platform services.
Ms Cass-Gottlieb said the ACCC’s 10th and final report of the Digital Platform Services Inquiry found while these services brought many benefits, they had also created harms that current competition and consumer laws could not adequately address.
“This is why we continue to recommend that targeted regulation of digital platform services is needed to increase competition and innovation, and protect consumers in digital markets,” she said.
Ms Cass-Gottlieb said there was a need for an economy-wide unfair trading practices prohibition, an external dispute resolution body for digital platform services, and a new digital competition regime.
She said consumers continued to face unfair trading practices in digital markets including manipulative design practices, such as user interfaces that direct consumers to more expensive subscriptions or purchase options.
“72 percent of Australian consumers surveyed by the ACCC reported that they had encountered potentially unfair practices when shopping online, such as accidental subscriptions or hidden fees.
“An unfair trading practices prohibition is required to protect consumers from these kinds of tactics, both online and offline.”
Ms Cass-Gottlieb said rapidly evolving digital markets and emerging technologies, like cloud computing and generative AI, may exacerbate existing risks to competition and consumers in Australia or give rise to new ones.
She said, for example, cloud computing was continuing to grow both globally and in Australia, providing significant benefits for businesses and consumers, the ACCC’s report identified a range of potential competition risks in this sector.
“We found that the major providers of cloud computing in Australia – Amazon, Microsoft and Google – are vast, incumbent digital platforms that are vertically integrated across the cloud technology stack.
“Vertically-integrated cloud providers may be incentivised to engage in conduct that could harm their competitors – for example, anti-competitively bundling their own services across different layers of the cloud stack.”
Ms Cass-Gottlieb said the report also found that generative AI developers and deployers generally required access to significant cloud computing power to train and deploy their products.
“However, cloud providers may be incentivised to anti-competitively bundle, tie or self-preference their own generative AI products above those of competitors.”
Read the full report: Digital platform services inquiry 2020-25.
