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Government Response to ACCC Digital

Platform Services Inquiry

ACCC Recommendation 1: Economy-wide consumer

measures

The ACCC continues to recommend the introduction of new and expanded economy-wide

consumer measures, including an economy-wide prohibition against unfair trading

practices and strengthening of the unfair contract terms laws. These reforms, alongside

These laws:

• amend the Competition and Consumer Act 2010 to increase the maximum penalty

applicable for anti-competitive behaviour and certain breaches of competition consumer

law;

• amend the Competition and Consumer Act 2010 and Australian Securities and Investments

Commission Act 2001 to establish a civil penalty regime prohibiting the use of, and

reliance on, unfair contract terms in standard form contracts; and

• expand the class of contracts that are covered by the unfair contract terms.

Additionally, the Government has released a Consultation Regulation Impact Statement

(Consultation RIS) on options to address unfair trading practices. The Consultation RIS seeks

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ACCC Recommendation 2: Digital platform specific

consumer measures

The ACCC recommends additional targeted measures to protect users of digital platforms,

which should apply to all relevant digital platform services, including:

• Mandatory processes to prevent and remove scams, harmful apps and fake reviews

including:

– a notice-and-action mechanism

• Ensuring consumers and small business have access to an independent external

ombuds scheme.

The Government supports in principle this recommendation.

The Government is committed to combatting scams and online fraud, and provided $86.5

million in the 2023-24 Budget for anti-scam measures, including the establishment of a new

National Anti-Scam Centre. The Centre, launched on 1 July 2023, will bring together the private

sector, regulators, and law enforcement in the fight against scams. The Government is exploring

the development of industry codes to outline the responsibilities of the private sector, including

digital platforms, in relation to scam activity.

The Government will also do more work to identify and classify the issues arising from harmful

balanced solutions that take account of potential compliance burden and practical implications

for both the digital platforms and those that rely on online reviews. This will include considering

whether disputes over fake reviews could be effectively managed through proposed dispute

resolution processes as well as potentially utilising misinformation and disinformation and

scams regulation.

The Government accepts the ACCC’s findings that digital platforms do not have adequate

processes for consumers to raise issues and concerns experienced online. A lack of effective

dispute resolution processes can reduce trust and confidence in digital platform services and

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prevent Australians from taking full advantage of the benefits provided by digital platforms. The

Government will undertake further work to develop internal and external dispute resolution

requirements by calling on industry to develop voluntary internal dispute resolution standards

and promote competition in markets for digital platform services. These should be

implemented through a new power to make mandatory codes of conduct for ‘designated’

digital platforms based on principles set out in legislation.

Each code would be for a single type of digital platform service (i.e. service-specific codes)

and contain targeted obligations based on the legislated principles. This would allow

flexibility to tailor the obligations to the specific competition issues relevant to that service

as these change over time.

These codes would only apply to ‘designated’ digital platforms that meet clear criteria

relevant to their incentive and ability to harm competition.

• anti-competitive self-preferencing

• anti-competitive tying

• exclusive pre-installation and default agreements that hinder competition

• impediments to consumer switching

• impediments to interoperability

• data-related barriers to entry and expansion, where privacy impacts can be managed

• a lack of transparency

• unfair dealings with business users

• exclusivity and price parity clauses in contracts with business users.

•

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justifiable reasons for the conduct (such as necessary and proportionate privacy or security

justifications).

The Government supports in principle recommendations 3 and 4.

The ACCC presented a strong case for the development of a new ex ante digital competition

regime that addresses anti-competitive behaviours of certain digital platforms.

Under a new regime, some digital platforms could be designated to service-specific codes,

which could include imposing targeted obligations and prohibitions relating to specific types of

anti-competitive conduct.

The evolution of digital platforms has provided significant benefits for consumers and

businesses, reducing the costs of a variety of transactions and providing new services, often at

critical to develop a framework that ensures Australians continue to enjoy the benefits of the

best technology in the world. Part of designing the new framework would include considering

the broader allocation of powers for the regulator to enforce the regime and undertake roles

under other reforms. This will include considering providing the ACCC with information-

gathering powers to assist with preparing periodic reports to the Government under the News

Media and Digital Platforms Mandatory Bargaining Code.

The Government will task Treasury to commence work on the design and form of a possible

legislative framework which could enable the creation of service-specific codes. The outcomes

of this work would be informed by extensive consultation on an appropriate framework and

governance model. In line with the evidence presented by the ACCC, the Government would