Competition watchdog the ACCC has recommended a range of measures to address harms from digital platforms to Australian consumers, small businesses and competition.
The Australian Competition and Consumer Commission wants legally binding codes of conduct, applied service-by-service, which require certain digital platforms including Google and Facebook to address issues including anti-competitive self-preferencing.
The fifth report of the five-year Digital Platform Services Inquiry has proposed that platforms be subject to mandatory dispute resolution processes and stronger requirements for combating scams, harmful apps and fake reviews, among other measures.
ACCC chair Gina Cass-Gottlieb said: “We know that the expansion of digital platforms in Australia has brought many benefits to Australian consumers and businesses.
“This expansion of digital platform services has also created risks and harms that our current consumer and competition laws are not always able to address.
“Our analysis has identified concerning consumer and competition harms across a range of digital platform services that are widespread, entrenched, and systemic.
“The critical positions that digital platforms hold, as ‘gatekeepers’ or ‘intermediaries’ between businesses and consumers, mean they have a broad influence across the economy, making the reforms we are recommending crucial and necessary for all Australians.”
The ACCC and other agencies have observed a significant and sustained increase in scams on digital platforms targeting consumers, including those experiencing vulnerability. Consumers have also experienced harms from inappropriate and fraudulent apps made available on app stores, as well as from fake reviews and review manipulation.
“Digital platforms that host or otherwise act as intermediaries between scammers and their victims are in a unique position to identify and stop scams and remove harmful apps,” Cass-Gottlieb said.
“Losses reported to Scamwatch from scams conducted via social networking and mobile apps almost doubled in the last year between 2020 and 2021, with $49 million recorded in 2020 compared with $92 million in 2021. This shows that digital platforms need to do more to stop their users from being scammed.
“We also need more action on fake reviews from platforms whose services feature ratings and reviews, including those appearing on search, social media, app stores and online marketplaces.
“These problems have been made worse by a lack of avenues for dispute resolution for consumers and small businesses, who often simply give up on seeking redress because they cannot get the digital platforms to properly consider the problem."
The ACCC’s report recommends new laws that require digital platforms to:
- provide user-friendly processes for reporting scams, harmful apps, and fake reviews, and to respond to such reports
- reduce the risk of scams by verifying certain business users such as advertisers, app developers and merchants
- publish review verification processes to provide important information to readers of online reviews to help them assess the reliability of reviews on the platform
- report on scams, harmful apps and fake reviews on their services, and the measures taken to address them
- ensure consumers and small businesses can access appropriate dispute resolution, supported by the establishment of a new digital platform ombuds scheme.
The ACCC also recommends a regulatory regime to work alongside Australia’s existing competition laws that would address anti-competitive conduct, unfair treatment of business users and barriers to entry and expansion by potential rivals.
“We are calling for service-specific codes of conduct that apply to designated digital platforms,” Cass-Gottlieb said.
“This would ensure the obligations are appropriately targeted to particular competition issues present in specified digital platform services, allow consultation with stakeholders, and provide the flexibility to address emerging and new forms of harmful conduct.”
Service-specific codes of conduct could include targeted obligations to:
- prevent anti-competitive self-preferencing, tying and exclusive pre-installation arrangements
- address data advantages
- ensure fair treatment of business users
- improve switching, interoperability and transparency.
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