The Australian Competition and Consumer Commission (ACCC) has released the final report of its Digital Platform Services Inquiry, recommending a new digital competition regime to address ongoing harms to consumers and businesses that current laws fail to resolve.
ACCC Chair Gina Cass-Gottlieb said digital platforms remain essential to productivity and economic growth but continue to exhibit practices that disadvantage users and small businesses. “These services have brought many benefits, but they have also created harms that our current competition and consumer laws cannot adequately address.” Cass-Gottlieb said.
The report’s recommendations
The report supports measures including a prohibition on unfair trading practices, the creation of an external dispute resolution body for digital platform services, and the establishment of a comprehensive digital competition framework.
Among the key concerns are manipulative design practices that steer consumers toward higher-cost options and ongoing barriers to switching services.
Majority of online consumers experience scams
An ACCC survey found that 72% of Australian consumers had experienced potentially unfair online practices.
ACCC Digital Platform Services Inquiry: Rates of unfair practices
82% supported a specialised body to escalate unresolved disputes with digital platforms, with the most important platforms to consider being online marketplaces and social media services.
Cass-Gottlieb noted that small businesses are particularly affected when digital platforms host fake reviews or deactivate accounts, impairing access to customers. “An external dispute resolution body would also help Australian small businesses who rely on digital platforms to reach their customers,” she said.
Gina Cass-Gottlieb
Breaking down the tech monopoly
The report also highlights anti-competitive conduct by dominant platforms, including self-preferencing, tying, exclusivity, and restricted access to essential hardware or data. These behaviours undermine competition and consumer outcomes, according to the ACCC.
Several jurisdictions, including the EU, UK, Germany, and Japan, have introduced similar regulatory approaches. Cass-Gottlieb said Australia must now act. “It is timely to progress a new digital competition regime in Australia which will increase contestability, benefit both local and foreign companies that rely on access to these platforms to conduct business in Australia, and support a growing economy,” she said.
The report flags emerging risks from sectors like cloud computing and generative AI. It found that major cloud providers, Amazon, Microsoft, and Google, hold dominant, vertically integrated positions and may bundle or favour their own AI services to the detriment of rivals. This could restrict innovation and lead to higher costs for users.
The ACCC’s report concludes a five-year inquiry that examined markets such as search engines, online marketplaces, social media, app stores, and messaging services. It follows the Government’s in-principle support for new regulation, with consultation on a competition regime having begun in December 2024.