Digital & Innovation

Legislative reform for large digital platforms

Health Industry Hub | March 2, 2022 |
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Digital & Innovation: The ACCC is seeking views from consumers, businesses and other parties on options for legislative reform to address concerns about the dominance of digital platforms.

discussion paper, released this week, outlines options for addressing harms to competition, consumers, and business users in a range of areas dominated by large digital platforms, including social media, search, app marketplaces, general online retail marketplaces and ad tech.

“The upcoming fifth report will mark the half-way point of 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,” ACCC Chair Rod 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,” Mr Sims said.

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The discussion paper outlines potential measures as part of a possible new regulatory framework to promote competition and increase consumer welfare in digital platform services. This is important to ensure innovation and growth in the digital services reliant on dominant or ‘gatekeeper’ digital platforms, and increased productivity.

A new regulatory framework could incorporate measures to address anti-competitive conduct (for example anti-competitively preferencing a platform’s own services above those of its business users), barriers to entry (such as access to data), bargaining imbalances, and insufficient consumer and business user protections (including effective dispute resolution processes).

The paper also outlines other potential measures to improve consumer protection, including obligations on platforms to deal more effectively with online scams and restrictions on other conduct that harms consumers, such as exploitative or manipulative user interfaces.

“Since the ACCC began examining digital platform services in 2017, large digital platforms such as Google, Apple and Meta (Facebook) have continued to grow and expand their impact and influence on the economy and our day-to-day lives,” Mr Sims said.

“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.”

“We are looking at whether we need additional laws or reform to make the online environment fairer for businesses and safer for consumers,” Mr Sims said.

The discussion paper outlines various options, and the ACCC has not yet determined which proposals, if any, it will finally recommend.

“We are looking closely at the significant reforms for digital platforms occurring or being proposed in the European Union, the United Kingdom, the United States and in the Asia-Pacific region given that these platforms operate globally. 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,” Mr Sims said.

“The News Media Bargaining Code, which was legislated by the Australian Government in 2021, is a great example of how regulatory change can quickly and effectively address the consequences of the largest platform’s market power.”

Following the introduction of the Code, Google and Meta reached voluntary commercial deals with news media businesses which have performed an important role in strengthening Australian journalism.

“We encourage all interested parties and consumers to provide their views to inform our assessment on whether a new framework is needed to foster competition and protect consumers in relation to digital platform services,” Mr Sims said.

Submissions to this discussion paper can be made to sends e-mail) by 1 April 2022. Further information is available here.

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