ACCC calls for new digital platform competition laws

The Australian Competition and Consumer Commission (ACCC) is calling for the introduction of new competition laws in response to the expansion of digital platforms such as Amazon, Apple and Google.

In a new report, the ACCC argued that new competition laws will be essential to address the effect the investments made by digital platforms to develop new technologies are having on the Australian economy and society.

ACCC Chair Gina Cass-Gottlieb said the report adds to evidence supporting the ACCC’s recommendations that competition and consumer laws need an urgent update to ensure consumers and businesses continue to benefit from the opportunities created by digital platform services.

“The continued expansion of digital platforms has increased the risk of those platforms engaging in harmful behaviour, such as invasive data collection practices and consumer lock-in practices that can reduce choice and stifle innovation,” she said. “Robust competition is critical for markets to function well. As the digital economy evolves and the ecosystems of digital platforms continue to expand, we must be equipped with the appropriate regulatory tools to ensure effective competition in these markets.”

According to the report, new developments such as the tendency of digital platforms to embed consumer cloud storage within their operating systems, as well as data collection practices through increasingly popular consumer smart home devices, threaten to further distort the competitive landscape.

“Integrated cloud storage services can be convenient for consumers, but they can also discourage consumers from purchasing new products and services outside the ecosystem. This makes it harder for competitors who offer standalone services to compete and potentially stifles the development of innovative products,” Cass-Gottlieb said. “[Meanwhile] consumers who use multiple products from a single digital platform may be forced to agree to unfavourable terms and conditions and/or accept unpalatable data collection practices due to a lack of suitable alternatives or because it is simply too inconvenient or costly to move out of that ecosystem.”

The ACCC is also recommending that competition and consumer laws be modernised to reflect emerging technologies such as generative AI and virtual reality.

Specific recommendations include new service-specific mandatory codes of conduct for particular ‘designated digital platforms’, based on principles set out in legislation. The ACCC has also proposed mandatory obligations on all digital platforms to address scams, harmful apps and fake reviews.

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