Australia’s consumer watchdog calls for new laws to stop scams and rein in anti-competitive behaviour online

Australia's competition regulator has run out of patience with digital platforms such as Google and Facebook and has recommended new laws to clamp down on scams, address consumer complaints and rein in anti-competitive behaviour.

Releasing its fifth progress report on digital platforms since it began an inquiry in 2017, the Australian Competition and Consumer Commission (ACCC) has called for industry-specific legislation, saying it has identified "widespread, entrenched and systematic" consumer and competition "harms".

It also wanted digital platforms to be required to provide user-friendly processes for alerting to scams, noting losses reported to Scamwatch from schemes on social networking and mobile apps almost doubled to $92m in 2021.

Google and Facebook have attempted to address competition concerns held by Australian media companies, who objected to the tech giants using their output without paying for it. Agreements have led to millions flowing back to local newsrooms.

But other competition concerns remain, including the way digital platforms preference their own services (particularly in advertising), use data they collect and tie customers to their services.

It comes as Twitter, which has been bought by billionaire Elon Musk, said it would lay off half its staff, including Australian employees, many of whom are involved in moderation.

In its latest six-monthly report, the ACCC said it had "identified concerning consumer and competition harms across a range of digital platform services that are widespread, entrenched, and systemic".

"The critical positions that digital platforms hold, as 'gatekeepers' or 'intermediaries' between businesses and consumers, mean they have a broad influence across the economy, making the reforms we are recommending crucial and necessary for all Australians," the ACC chair Gina Cass-Gottlieb said.

The report called for legislation requiring digital platforms to provide user-friendly processes for reporting scams, harmful apps and fake reviews, and a proper dispute resolution process to be established.

It said losses reported to Scamwatch from mobile and social media scams almost doubled to $92m in 2021.

"This shows that digital platforms need to do more to stop their users from being scammed," Cass-Gottlieb said.

"We also need more action on fake reviews from platforms whose services feature ratings and reviews, including those appearing on search, social media, app stores and online market places," she said.

The watchdog said consumers routinely reported difficulties resolving disputes with digital platform companies, with few avenues for contacting and pursuing problems.

It has also recommended a new digital platform ombudsman scheme and wants a verification system for certain business users. Another suggested requirement is for digital platforms to publish their review verification processes.

The ACCC noted similar reforms are occurring overseas and that reform in Australia would align with the global shift towards placing greater onus on digital platforms to be more responsible and responsive.

The report has also proposed mandatory codes of conduct for certain platforms noting that the development of just two or three major players had led to a range of anti-competitive behaviours.

"We are calling for service-specific codes of conduct that apply to designated digital platforms," Cass-Gottlieb said.

The ACCC said it had observed a range of conduct being undertaken by the most powerful digital platforms, including self-preferencing, exclusivity agreements, impeding switching and withholding access to important hardware, software and data inputs.

"We are also concerned about lack of transparency and the ability of digital platforms with market power to degrade the quality of the services they offer, including in the terms on which services are provided to business users," it said.

"The need to prevent and deter such conduct where it reduces competition is a major focus of this report."

It also cited the hundreds of acquisitions made by platforms such as Google, Meta, Apple, Microsoft and Amazon, many involving nascent or potential competitors.

The digital platforms have also been asked to develop a separate code to deal with fake news under the auspices of the Australian Communications and Media Authority. It too has come under criticism for being too restrictive.

The treasurer, Jim Chalmers, said the government was considering the ACCC's latest recommendations and would consult publicly to ensure Australia has the right regulations in place to be a leading digital economy.

"The Albanese government is already strengthening consumer protections, including through recently introduced legislation to prohibit unfair contract terms and increase penalties for anti-competitive behaviour, and has committed to establish a new National Anti-Scam Centre," he said.