Consumers and businesses need stronger protections against digital platforms that have “entrenched positions of economic power, enabling them to engage in exploitative and exclusionary conduct,” the Australian Competition and Consumer Commission (ACCC) says.
Its 408-page Digital Platform Services report is the result of a five-year study of social networks, online marketplaces, app stores, and search engines, and finds that Australians are at “significant risk of harm” from the behaviour of platform operators, including those based in Australia.
These include a range of unfair trading practices, harmful apps, and the creation, buying, and selling of fake reviews.
A survey on consumers conducted as part of the study found that 72 percent had encountered a potentially unfair practice during this time, such as hidden charges, accidental clicks, or accidental subscriptions.
In many cases, it wasn’t made clear to users how they could complain about these practices or dispute charges, and as a result, many gave up.
While no platform is named as being entirely blameless, “these harms are particularly prevalent across services where the ACCC has identified a small number of large digital platforms holding significant market power,” the report says.
While increased competition would be the best way to ensure fairness, the Commission recommends the government continue to tighten regulation on the way digital platforms operate in Australia.
“While these services have brought many benefits, they have also created harms that our current competition and consumer laws cannot adequately address,” said ACCC Chair Gina Cass-Gottlieb.
“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.”
Existing recommendations included a ban on unfair trading practices, enforceable codes of conduct for designated digital platforms—including competition protections—and mandatory processes to help consumers, including removing scams and harmful apps, verifying advertisers, and introducing a digital ombudsman to handle disputes.
The consumer survey found more than eight in 10 Australians supported the introduction of an independent dispute resolution body to handle complaints.
Support was highest for the policing of general online marketplaces, such as Amazon, Temu, and eBay, followed by social networks like Facebook, Instagram, and X, and online messaging platforms.
The Commission also highlighted the need to stay ahead of emerging issues in newer technologies, such as cloud computing and artificial intelligence (AI), which are currently dominated by a relatively small number of providers, including Amazon, Microsoft, and Google.
“Harms to competition in the generative AI sector could hamper innovation, result in lower quality products and services, and force Australian businesses and consumers to pay more than they otherwise would to utilise this technology,” Cass-Gottlieb said.
“It is critical that the proposed digital competition regime enable the ACCC to continue monitoring changes to services it has previously examined, as well as new technologies that emerge over time.”
Any proposals to rein in U.S. tech firms are likely to meet strong opposition from the providers themselves, many of whom have already complained to officials there about Australia’s current digital media laws.
