Creating a battleground: ACCC gains power as digital platforms are to be subject to specific monitoring and regulation

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By Kathryn Edghill, Partner

In a world first for Australia, the Federal Government announced on 12 December 2019 that it was making an “immediate commitment” to specifically regulate digital platform markets and participants.  The foreshadowed regulation will involve aspects of competition and consumer law, media regulation and privacy and data protection, and is a significant “win” for the Australian Competition and Consumer Commission (ACCC) which had recommended specific regulation in its Digital Platforms Inquiry final report which was released in July of this year.

The government has committed, among other things, to:

  • establishing a special unit in the ACCC to “monitor and report on the state of competition and consumer protection in digital platform markets, take enforcement action as necessary, and undertake inquiries as directed by the Treasurer, starting with the supply of online advertising and ad-tech services” The ACCC immediately announced it would establish a permanent Digital Platform Branch and start a “new inquiry into the digital advertising tech supply chain, focusing on digital display ads”.  In 2021 it will be expected to report on an inquiry into Google’s rollout of options in Europe to allow consumers to choose their default internet browser and search engine
  • addressing concerns regarding the imbalance in bargaining power between digital platforms and news media businesses by requiring the ACCC to facilitate the development of a voluntary code of conduct by November 2020 (with a progress report in May 2020). The government will assess the effectiveness of the voluntary code throughout 2021 and, if it determines it is falling short it may take further action, which could include a mandatory code.
  • continuing work underway through Consumer Affairs Australia and New Zealand on how an unfair trading prohibition could be adopted in the Australian context to address potentially unfair business practices and to consult on policy options to strengthen unfair contract terms protections for small businesses
  • commencing “a staged process to reform media regulation towards an end state of a platform-neutral regulatory framework covering both online and offline delivery of media content to Australian consumers”. This will include working with the Australian Communications and Media Authority (the ACMA) on uniform classification codes and Australian content obligations on free to air television.
  • strengthening protections for privacy and data, including developing legislation for public consultation to increase penalties under the Privacy Act to match those under the Australian Consumer Law and to require development of a binding online privacy code.
  • working with major digital platforms to scope and implement a pilot external dispute resolution mechanism for complaints between consumers, businesses and digital platforms.

These commitments represent a significant step in industry specific regulation, designed to control, if not rein in what the ACCC found to be the substantial market power of large digital platforms such as Google and Facebook. They will see the ACCC given significant powers to investigate and enforce conduct of digital platform providers and sets the scene for what is likely to become a battleground between regulator and those providers in the years to come.

 

For further information, please do not hesitate to contact us.

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