Digital Platform Regulatory Reform – Government flags "in principle" support for ACCC recommendations

In its fifth interim Digital Platform Services Inquiry report published in November 2022 (and again in its seventh interim report on the topic of "expanding digital platform ecosystems" published in November 2023), the ACCC made a series of recommendations for regulatory reform to address what it sees as competition and consumer law issues specifically affecting digital platforms.

Today, the Federal Government released its long-awaited response to the ACCC's regulatory reform proposals, expressing "in principle" support for each of the ACCC's recommendations.

Specifically:

1. Economy-wide consumer protection measures (recommendation 1): The Government has already commenced consultations on a proposed 'unfair trading' prohibition (which would add to the existing provisions relating to false, misleading and deceptive conduct, and 'unconscionable' conduct, in our consumer protection law) and has recently amended the unfair contract terms provisions of the consumer law to provide for penalties for proposing, or purporting to rely upon, an 'unfair' term of a standard form consumer or small business contract.

1. Digital platform consumer protection measures (recommendation 2): The Government has committed to enacting, by July 2024, "internal and external dispute resolution requirements" for digital platforms to respond to consumer complaints (including in relation to fake reviews, scams and fraud). The response document foreshadows a specific code for app marketplaces "to address concerns regarding harmful apps" and mandatory processes to prevent and remove scams, harmful apps and fake reviews including: a notice-and-action mechanism, verification of certain business users of additional verification of advertisers of financial services and products and improved review verification disclosures of public reporting on mitigation efforts.

1. Ex ante service-specific codes (recommendations 3 and 4): The Government considers that there is "a strong case" for the development of a new ex ante regime, in the form of service-specific mandatory codes for designated digital platform services.  The response notes that "[t]he introduction of any new ex ante regime would be a significant undertaking and it would be critical to develop a framework that ensures Australians continue to enjoy the benefits of the best technology in the world. Part of designing the new framework would include considering the broader allocation of powers for the regulator to enforce the regime and undertake roles under other reforms".

The Government has expressly acknowledged the importance of ensuring that any Australian framework "is consistent and cohesive with overseas approaches", and has said that it will work with international counterparts in this regard.

Next steps

The Government has tasked Treasury to commence work on the design and form of a possible legislative framework which could enable the creation of service-specific codes.

The Government has said that it is closely monitoring international developments and will work with its international counterparts to ensure any Australian framework is consistent and cohesive with overseas approaches. It has also said that it will undertake "extensive consultation on an appropriate framework" and that it will take a "harms-based approach" to prioritising the reforms proposed by the ACCC, noting that international experience has demonstrated the complexities in achieving the appropriate and effective regulatory approach, and that it will call on digital platforms to work with government in good faith.