The Australian Competition and Consumer Commission (ACCC) has raised the alarm on the big five tech giants – Amazon, Apple, Google, Meta, and Microsoft – and is warning that Australia is in dire need of regulatory reform as these companies expand into emerging technologies and other markets.
In the Digital Platform Services Inquiry, the seventh interim report on digital platforms from the ACCC (if it sounds familiar, it’s because we covered the fifth edition this time last year, and the prelude to this very report in March), the consumer protections body considers consumer harm risks from expanding digital platform ecosystems.
The Digital Platform Services interim report discusses technologies like artificial intelligence, virtual reality, voice assistants, and smart homes, along with a range of other technology categories, and warns that the domination of the earlier mentioned companies “is exacerbating risks of harms to competition and consumers.”
“We know that online products and services offer many benefits for consumers and businesses. The significant investments made by digital platforms to develop new technologies are having a transformative effect on our society and economy,” ACCC Chair Gina Cass-Gottlieb said in a statement.
“The continued expansion of digital platforms has also 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.”
In discussing emerging issues, the ACCC notes that although a lot of the areas where we’re seeing big tech companies invest, such as in virtual reality, cloud computing, robotics, and quantum computing, we’re still yet to see how these technologies will fully transform the economy, if at all.
“The substantial investments made by digital platform service providers across these areas will prepare them for an evolving landscape,” the ACCC notes in its report, adding that the scale of these companies is often so large that it’s often difficult for smaller competitors to match, “owing to the large revenue generated by their core services”.
As such, the ACCC is, once again, urging the introduction of new laws to make sure competition is fair and that consumer safety is kept at the forefront. The body points to Europe’s Digital Markets Act and Digital Services Act, which impose measures on tech companies to promote competition and consumer protection in the region.
Just like in the report from last year, the ACCC is recommending platform-specific consumer measures “to address scams, harmful apps, fake reviews, and to improve dispute resolution with mandatory internal dispute resolution standards and an external ombuds scheme.” The consumer protection body is also calling on unfair trading practice bans, and stronger unfair contract term protections, along with a competition regime “with targeted obligations in service-specific codes of conduct to apply to a small number of designated digital platforms with the ability and incentive to engage in anti-competitive conduct.”
“Codes would include targeted obligations to address issues such as anti-competitive self-preferencing and tying, exclusive pre-installation and defaults, and impediments to switching and interoperability,” the report reads.
The ACCC added that “It’s not always clear from the relevant privacy policies if the data collected exceeds that which is needed for device functionality or product improvement.”
Some of these recommendations were acted upon after the publishing of the November 2022 report, including amendments to unfair contract terms laws, and a government consultation on economy-wide unfair trading practices prohibition (which the ACCC supports).
“The Australian Government has also signalled that there will be codes of conduct developed to impose obligations on key players in the scams ecosystem, including banks, telecommunication providers, social media platforms, and other industry players,” the report reads.
The ACCC has also reiterated changes signalled in the Regulatory Reform Report, “including self-preferencing, tying, exclusivity agreements, lack of transparency, and withholding access to important hardware, software, and data inputs.”
From here, the Commission is looking forward to working with the government on reform. The Digital Platform Services Inquiry is set to be completed and passed to the Treasurer by March 31, 2025.
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