ACCC says ‘critical need’ for regulatory reform against tech giants

As tech giants including Amazon, Apple, Google, Meta and Microsoft continue to expand their digital platforms, there is a critical need for regulatory reform, according to the Australian Competition and Consumer Commission’s (ACCC) latest report.

The report examined the strategies of the five platforms, and found that “their expanding reach into our daily lives and livelihoods – via multiple interconnected products and services – is exacerbating risks of harms to competition and consumers”.

“We know that online products and services offer many benefits for consumers and businesses,” said Gina Cass-Gottlieb, ACCC chair. “The significant investments made by digital platforms to develop new technologies are having a transformative effect on our society and economy.”

Cass-Gottlieb said despite these positive effects, the continued expansion of digital platforms has also increased the risk of harmful behaviour, “such as invasive data collection practices and consumer lock-in practices that can reduce choice and stifle innovation”.

“This report is further evidence supporting our earlier recommendations that we should update our competition and consumer laws to ensure consumers and businesses continue to benefit from the opportunities created by digital platform services,” she added.

“Our proposed reforms include a call for targeted consumer protections and service-specific codes to prevent anti-competitive conduct by particular designated digital platforms.”

The consumer watchdog said the tech giants have expanded beyond their original offerings (social media and search) to include generative AI, digital health services, education, information storage and financial products, and according to Cass-Gottlieb, that poses an issue.

“Australians increasingly use digital platforms for work, study and play and can benefit from their wide range of interconnected products and services. While the size and scale of digital platforms alone does not raise concern, there is a risk that this expansion may be driven by a desire from digital platforms to entrench or extend their market power,” she said.

The ACCC claims the platforms can use practices to limit customer choice or deter innovation from competitors, can trap consumers with their cloud and information storage offerings, and deter consumers from switching to different services through the cost and inconvenience of transferring files.

“Integrated cloud storage services can be convenient for consumers, but they can also discourage consumers from purchasing new products and services outside the ecosystem,” Cass-Gottlieb continued.

“This makes it harder for competitors who offer standalone services to compete and potentially stifles the development of innovative products.”

The ACCC also claims the data collection practices of digital platforms are unclear and exceed the necessary, leaving consumers at risk of losing control over their data.

It said the role the tech giants play in developing emerging technologies is “further evidence that we need to ensure our competition laws are fit-for-purpose”.


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