Australian competition and consumer protection watchdog calls for a regulatory reform

The report warns of the risks these platforms pose to competition and consumers through practices such as invasive data collection and consumer lock-in. It recommends updating competition and consumer laws, implementing service-specific codes, and introducing targeted consumer protections

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The Australian Competition and Consumer Commission (ACCC) has published a report underscoring the need for regulatory reform in response to the expanding influence of digital platforms like Amazon, Apple, Google, Meta, and Microsoft. In particular, in emerging technologies and various markets.

Digital platforms’ increasing integration into people’s daily lives and business operations through interconnected products and services heightens the risks of harmful practices and anti-competitive behavior. The report uses a case of smart home devices and consumer cloud storage to illustrate the repercussions of digital platforms. The advantages of digital platforms, such as convenience and transformative effects on society and the economy, should sometimes be overshadowed by practices like invasive data collection and consumer lock-in, which can limit choice and impede innovation.

The proposed reforms include targeted consumer protections and service-specific codes. Platforms like Amazon, Apple, Google, Meta, and Microsoft have expanded beyond their core offerings, such as search and social media, into other markets like generative AI. While the sheer size of digital platforms may not raise concern itself, the report highlights the risk that their expansion is driven by a desire to solidify or extend their market power.

The expansion of digital platforms into new gatekeeper roles incorporating voice assistant technology into smart home devices, such as Google Assistant, Siri, and Alexa, offers opportunities for these platforms to influence users to prefer their products at the expense of rivals.

The recommendations proposed in the report build upon earlier recommendations from the ACCC’s Digital Platforms Services Inquiry. Recommendations include introducing new service-specific mandatory codes of conduct for designated digital platforms and new mandatory obligations on all digital platforms to address issues like scams, harmful apps, and fake reviews. The proposed regulatory framework would work with existing competition laws to tackle anti-competitive conduct, unfair treatment of business users, and barriers to entry and expansion for potential rivals.

Why does it matter?
The proposed recommendations aim to establish a regulatory framework that fosters effective competition and deters anti-competitive conduct within the digital platform sector.