The Australian government has given its “in-principle” support for new laws to cover some operational aspects of digital platforms, according to a recent report. The report states that the government will tread carefully in drafting these laws, given the unique nature of the digital economy and the potential impact of such laws on the industry. The recommendation for new laws and requirements to be placed on platform operators was made by the Australian Competition and Consumer Commission (ACCC) last year. The ACCC raised concerns about consumer protections and the ability of digital platforms such as Facebook, Instagram, Amazon, and TikTok to handle disputes and prevent scams or the distribution of harmful apps.
The government’s response, released by Treasury, states that further work will be undertaken to implement the ACCC’s recommendations, including consulting on the development of new laws. The federal government indicated it was open to other “economy-wide consumer measures” but noted that regulating platforms could be performed under broader actions it already has underway. The government said the ACCC had put forward a strong case relating to “additional competition measures for digital platforms” and “targeted competition obligations”, which would require new laws. “Under a new regime, some digital platforms could be designated to service-specific codes, which could include imposing targeted obligations and prohibitions relating to specific types of anti-competitive conduct,” it said.
The introduction of any new laws 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, the government said. “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,” it added. The government will task Treasury to commence work on the design and form of a possible legislative framework which could enable the creation of service-specific codes. The outcomes of this work would be informed by extensive consultation on an appropriate framework and governance model.
In line with the evidence presented by the ACCC, the government would take a harms-based approach to prioritising this work. ACCC chair Gina Cass-Gottlieb said it is aware 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,” she said. “Our analysis has identified concerning consumer and competition harms across a range of digital platform services that are widespread, entrenched, and systemic”.
The proposed laws would require digital platforms to provide user-friendly processes for reporting scams, harmful apps, and fake reviews, and to respond to such reports. They would also reduce the risk of scams by verifying certain business users such as advertisers, app developers, and merchants. The ACCC report recommends new laws requiring digital platforms to provide user-friendly processes for reporting scams, harmful apps, and fake reviews, and to respond to such reports. The report also recommends reducing the risk of scams by verifying certain business users such as advertisers, app developers, and merchants.
The government’s decision to explore new laws for digital platforms comes at a time when the digital economy is growing rapidly and the use of digital platforms is becoming increasingly ubiquitous. The COVID-19 pandemic has accelerated the shift towards digital platforms, with many businesses and consumers relying on them for essential services. However, the rapid growth of digital platforms has also raised concerns about their impact on competition, privacy, and consumer protection.
The proposed laws would help address some of these concerns by providing greater transparency and accountability for digital platforms. They would also help ensure that digital platforms are subject to the same level of regulation as other industries. However, the proposed laws would also need to strike a balance between protecting consumers and promoting innovation and growth in the digital economy.
The Australian government’s decision to explore new laws for digital platforms is a positive step towards ensuring that digital platforms are subject to greater transparency and accountability. The proposed laws would help address some of the concerns raised by the ACCC and would provide greater protection for consumers. However, the government will need to tread carefully in drafting these laws to ensure that they strike a balance between protecting consumers and promoting innovation and growth in the digital economy.
