Digital platform services inquiry 2020-2025 — Australian Competition Law

Digital platform services inquiry

ACCC (2020-2025)

Overview

Commencement: 10 Feb 2020
Government directs ACCC to conduct inquiry into markets for the supply of digital platform services.

Further Interim reports
Every six months

Final report due
31 March 2025

Ministerial direction
Enabled by s95H CCA

GOVERNMENT

Commencement - May 2022

Prime Minister: Morrison
Treasurer: Frydenberg
Party: Liberal

May 2022 -

Prime Minister: Albanese
Treasurer: Chalmers
Party: Labor

Visit ACCC inquiry website

Background and timeline

Following the findings in the ACCC’s Digital Platforms Inquiry The Australian Government directed the ACCC to conduct an inquiry into markets for the supply of digital platform services. These include search engines, social media services, private messaging services, content aggregation services and data practices.

The first interim report was completed in September 2020 and further interim reports are to be provided every six months, with a final report due 31 March 2025.

First interim report (Sept 2020) (online private messaging)

On 8 September 2020 the ACCC released an issues paper seeking view on private messaging services in Australia. The first interim report was released on 23 October 2020 (the September 2020 interim report)

Second interim report (March 2021) (app marketplaces)

On 8 September 2020 the ACCC released an issues paper seeking views on the the operation of app marketplaces in Australia. A report on app marketplaces was released on 28 April 2021.

Third interim report (September 2021) (search engines/browsers)

An issues paper was released on 11 March 2021 seeking views on the operation of browsers and search engines. The third interim report was released on 28 October 2021.

Fourth interim report (March 2022) (online retail marketplaces)

An issues paper was released in July 2021 seeking views on online retail marketplaces. The report is due by 31 March 2022.

Fifth interim report (September 2022) (regulation of digital platform services)

The ACCC released a discussion paper on 28 February 2022 seeking views on whether new regulatory tools are needed to address concerns in relation to the supply of digital platform services, and if so, sets out some options for regulatory reform.

The report was due by 30 September 2022 and was released to the public on 11 November 2022.

The government conducted a consultation on the ACCC recommendations and issued a response on 8 December 2024.

Sixth interim report (March 2023) (social media)

The ACCC released an issues paper on 16 August ‘seeking views on the operation of social media services in Australia …’

The report was due 31 March 2023 and was released to the public on 28 April 2023.

Seventh interim report (September 2023) (digital platform ecosystems)

The issues paper focuses on the expanding ecosystems of digital platform service providers.

The report was released on 27 November 2023

Eight interim report (March 2024) (data broker services)

The issues paper was released on 10 July 2023.

The report is due to the Treasurer by 31 May 2024

Ninth interim report (September 2024) (general search)

The issues paper was released on 18 March 2024

Commissioned research

The ACCC commissioned research to inform its analysis throughout the inquiry.

Government responses

Government response to September 2022 (fifth) report (Regulatory Reform)

On 8 December 2023 the Government issued its response to the ACCC’s Interim Report No 5 - Regulatory Reform. It has largely accepted recommendations. View Government Response. The full response is reproduced below pursuant to Creative Commons (CC) By Attribution 3.0 Australia licence. Source: The Treasury.

Government Response to ACCC Digital Platform Services Inquiry

ACCC Recommendation 1: Economy-wide consumer measures

The ACCC continues to recommend the introduction of new and expanded economy-wide consumer measures, including an economy-wide prohibition against unfair trading practices and strengthening of the unfair contract terms laws. These reforms, alongside targeted digital platform specific obligations, would assist in addressing some of the consumer protection concerns identified for digital platform services.

The Government supports in principle this recommendation.

The Government is committed to protecting Australian consumers. The Government has already introduced legislation that strengthens our unfair contract terms law, as part of the Treasury Laws Amendment (More Competition, Better Prices) Act 2022 in November 2022. These laws:

amend the Competition and Consumer Act 2010 to increase the maximum penalty applicable for anti-competitive behaviour and certain breaches of competition consumer law;
amend the Competition and Consumer Act 2010 and Australian Securities and Investments Commission Act 2001 to establish a civil penalty regime prohibiting the use of, and reliance on, unfair contract terms in standard form contracts; and
expand the class of contracts that are covered by the unfair contract terms.

Additionally, the Government has released a Consultation Regulation Impact Statement (Consultation RIS) on options to address unfair trading practices. The Consultation RIS seeks further evidence on the nature of unfair trading practices and the extent of any consumer and small business harm arising from potential gaps in the Australian Consumer Law.

The Government is committed to ensuring Australian consumers are treated fairly and can conduct business successfully.

ACCC Recommendation 2: Digital platform specific consumer measures

The ACCC recommends additional targeted measures to protect users of digital platforms, which should apply to all relevant digital platform services, including:

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
- improved review verification disclosures of public reporting on mitigation efforts.
Mandatory internal dispute resolution standards that ensure accessibility, timeliness, accountability, the ability to escalate to a human representative and transparency.\
Ensuring consumers and small business have access to an independent external ombuds scheme.

The Government supports in principle this recommendation.

The Government is committed to combatting scams and online fraud, and provided $86.5 million in the 2023-24 Budget for anti-scam measures, including the establishment of a new National Anti-Scam Centre. The Centre, launched on 1 July 2023, will bring together the private sector, regulators, and law enforcement in the fight against scams. The Government is exploring the development of industry codes to outline the responsibilities of the private sector, including digital platforms, in relation to scam activity.

The Government will also do more work to identify and classify the issues arising from harmful apps to ensure they are addressed. Further specific obligations on platforms to address concerns relating to harmful apps could be part of an App Marketplaces code under any new competition regime.

Online reviews are a valuable source of information for consumers and it is important that such information is genuine and reliable. Fake reviews can mislead consumers and result in significant harms for Australian businesses. The Government will consider appropriate and balanced solutions that take account of potential compliance burden and practical implications for both the digital platforms and those that rely on online reviews. This will include considering whether disputes over fake reviews could be effectively managed through proposed dispute resolution processes as well as potentially utilising misinformation and disinformation and scams regulation.

The Government accepts the ACCC’s findings that digital platforms do not have adequate processes for consumers to raise issues and concerns experienced online. A lack of effective dispute resolution processes can reduce trust and confidence in digital platform services and prevent Australians from taking full advantage of the benefits provided by digital platforms. The Government will undertake further work to develop internal and external dispute resolution requirements by calling on industry to develop voluntary internal dispute resolution standards by July 2024.

The Government is committed to ensuring that Australian consumers have access to appropriate pathways to voice their concerns and resolve issues they face online.

ACCC Recommendation 3: Additional competition measures for digital platforms

The ACCC recommends the introduction of additional competition measures to protect and promote competition in markets for digital platform services. These should be implemented through a new power to make mandatory codes of conduct for ‘designated’ digital platforms based on principles set out in legislation.

Each code would be for a single type of digital platform service (i.e. service-specific codes) and contain targeted obligations based on the legislated principles. This would allow flexibility to tailor the obligations to the specific competition issues relevant to that service as these change over time.

These codes would only apply to ‘designated’ digital platforms that meet clear criteria relevant to their incentive and ability to harm competition.

ACCC Recommendation 4: Targeted competition obligations

The framework for mandatory service-specific codes for Designated Digital Platforms (proposed under Recommendation 3) should support targeted obligations based on legislated principles to address, as required:

anti-competitive self-preferencing
anti-competitive tying
exclusive pre-installation and default agreements that hinder competition
impediments to consumer switching
impediments to interoperability
data-related barriers to entry and expansion, where privacy impacts can be managed
a lack of transparency
unfair dealings with business users
exclusivity and price parity clauses in contracts with business users.

The codes should be drafted so that compliance with their obligations can be assessed clearly and objectively. Obligations should be developed in consultation with industry and other stakeholders and targeted at the specific competition issues relevant to the type of service to which the code will apply. The drafting of obligations should consider any justifiable reasons for the conduct (such as necessary and proportionate privacy or security justifications).

The Government supports in principle recommendations 3 and 4.

The ACCC presented a strong case for the development of a new ex ante digital competition regime that addresses anti-competitive behaviours of certain digital platforms.

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.

The evolution of digital platforms has provided significant benefits for consumers and businesses, reducing the costs of a variety of transactions and providing new services, often at low or no direct costs. However, the Government agrees that due to the unique nature of the digital economy, some platforms play a gatekeeper role for consumers and businesses and haveentrenched market power in particular services. This has resulted in anti-competitive practices, such as self-preferencing products and services and the creation of other barriers to competition, which have affected consumer choice and bargaining power.

The 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. This will include considering providing the ACCC with informationgathering powers to assist with preparing periodic reports to the Government under the News Media and Digital Platforms Mandatory Bargaining Code.

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.

The Government is closely monitoring international developments and will work with our international counterparts to ensure any Australian framework is consistent and cohesive with overseas approaches. International experience has demonstrated the complexities in achieving the appropriate and effective regulatory approach, and we call on digital platforms to work with government in good faith

Final report

Due 31 March 2025

Interim reports

Overview

The first interim report was due on 30 September, with further interim reports to be published every six months until the final report in March 2025.

First interim report (September 2020)
(search engines, social media, private messaging)

View first interim report

The first interim report had a particular focus on:

internet search engines
social media
online private messaging

Second interim report (March 2021)
(mobile app marketplaces)

The second interim report was focused on app marketplaces. Submissions have been published.

View second interim report page

On 8 September 2020 the ACCC released an issues paper and fact sheets seeking views on the operation of app marketplaces in Australia. Responses were due by 2 October 2020 and have been published. The report was released on 28 April 2021.

Questions for consideration

In its Issues Paper the ACCC states that it is seeking views on:

1) The ability and incentive for Apple and Google to link or bundle their other goods and services with their app marketplaces, and any effect this has on consumers and businesses.

2) How Apple and Google’s various roles as the key suppliers of app marketplaces, but also as app developers, operators of the mobile licensing operating system and device manufacturers affect the ability of third party app providers to compete, including the impact of app marketplace fee structures on rivals’ costs.

3) Terms, conditions and fees (including in-app purchases) imposed on businesses to place apps on app marketplaces.

4) The effect of app marketplace fee structures on innovation.

5) How app marketplaces determine whether an app is allowed on their marketplace, and the effect of this on app providers, developers and consumers;

6) How where an app is ranked in an app marketplace is determined.

7) The collection and use of consumer data by app marketplaces, and whether consumers are sufficiently informed about and have control over the extent of data that is collected.

8) Whether processes put in place by app marketplaces to protect consumers from harmful apps are working.

Third interim report (September 2021)
(search and browsers)

View third interim report page

The ACCC released an issues paper, ‘Digital Platform Services Inquiry – September 2021 Report on market dynamics and consumer choice screens in search services and web browsers’

The third interim report was released on 28 October 2021. The report “examines the provision of web browsers and general search services to Australian consumers and the effectiveness of choice screens in facilitating competition and improving consumer choice. The report also provides the ACCC’s advice to the Australian Government on Google’s rollout of search engine choice options on new Android devices in Europe.”

Fourth interim report (March 2022)
(online retail marketplaces)

View fourth interim report page

An issues paper was released in July 2021 seeking views on online retail marketplaces. The report was due by 31 March 2022.

Issues examined include:

“intensity of competition in the relevant markets
trends in online shopping and general online retail marketplaces
the conduct of marketplaces in their roles as platforms to facilitate interaction between third party sellers and consumers; including, where marketplaces also supply their own products on their platform, the impact that these sales and associated practices may have on competition with third-party sellers
relationships between marketplaces and third party sellers
relationships between marketplaces and consumers, as well as third party sellers and consumers.““

Fifth interim report (September 2022)
(regulation of digital platform services)

View fifth interim report page

View government response to fifth interim report

The ACCC released a discussion paper on 28 February 2022 seeking views on whether new regulatory tools are needed to address concerns in relation to the supply of digital platform services, and if so, sets out some options for regulatory reform. In particular, the report will consider:

“competition and consumer issues identified in the course of the Digital Platform Services Inquiry to date

competition and consumer issues identified in the Digital Advertising Services Inquiry and Digital Platforms Inquiry 2017-2019 (to the extent these matters fall within the scope of the Digital Platform Services Inquiry)
whether Australia’s current competition and consumer protection laws are sufficient to address these issues and, if reforms are needed to supplement existing laws, the options for regulatory reform.”

The report was due to the Treasurer by 30 September 2022 and was published on 11 November 2022.

For an explainer see Gilbert+Tobin, ‘ACCC recommends regulating digital platforms’ (11 November 2022).

The government consulted on the report from December 2022 - February 2023 (see Treasury Consultation on Regulatory Reform)

A government response to the report was issued on 8 December 2023, supporting key recommendations (see Government Response)

Sixth interim report (March 2023)
(competition and consumer concerns with social media)

View sixth interim report page

The ACCC released an issues paper on 16 August 2022 seeking views on ‘potential competition and consumer issues in the provision of social media services to consumers and businesses in Australia by social media platforms.’

It will consider:

‘The degree of competition between social media services

Trends in mergers and acquisitions by social media platforms and the effect of these activities on competition for social media services
The role of advertising services, including display advertising, sponsored posts and influencer advertising, offered by social media platforms on competition for social media services
The use and abuse of social media services for scams and misleading or deceptive content.’

The report was due to the Treasurer by 31 March 2023

Submissions on the issues paper were published on 12 October 2022.

The report was published on 28 April 2023.

View related ACCC media release.

View ACCC press release accompanying publication of the report.

Seventh interim report (September 2023)
(digital platform ecosystems)

View seventh interim report page

The issues paper focuses on the expanding ecosystems of digital platform service providers.

According to the Inquiry home page:

“The ACCC will consider potential competition and consumer issues and benefits from the expanding ecosystems of digital platform providers in Australia. This report will also consider smart home devices and consumer cloud storage solutions as examples of the expanding ecosystems of digital platform providers.

This report is the seventh interim report for the Digital Platform Services Inquiry and will consider the following areas relevant to expanding ecosystems of digital platform providers:

The expansion strategies of digital platform providers
The role of data in the expanding ecosystems of digital platform providers
The level of interrelatedness of products and services within a digital platform ecosystem, including whether interrelated through technical interoperability or by commercial practices such as bundling
Strategies to lock consumers into a single digital platform ecosystem
Potential competition issues, such as bundling and tying, self-preferencing and pre-installation arrangements and default settings
Potential consumer harms, such as conduct associated with the use of consumer data, dark patterns or other unfair or misleading behaviours

…”

View ACCC media release (March 2023)

Eighth interim report (March 2024)
(Data brokers)

View eighth interim report page

The issues paper focuses on Data Brokers

See Inquiry home page including issues paper and submissions. According the Inquiry website:

“The ACCC will consider potential competition and consumer issues in the supply of data broker services in Australia. Our report will focus on data brokers that collect information about people from various third-party sources. Data brokers use this information to create data products and services which they sell or share with other organisations (third-party data brokers).

This report is the eighth interim report of the Digital Platform Services Inquiry. It will focus on the data products and services supplied by third-party data brokers. In doing this, it will examine:

sources of data broker information
the types of information collected
methods of collection, storage, processing and analysing information
types of data broker products and services supplied and how these are used
competitive dynamics in the data broker industry in Australia
potential consumer or small business harms that may arise.

This report is due to be provided to the Treasurer by 31 March 2024.”

Ninth interim report (September 2024)
(General internet search)

View ninth interim report page

The issues paper was released on 18 March 2024.

The ACCC’s interim report page states:

The ACCC will revisit potential competition and consumer issues arising in the supply of general search services in Australia. Our report will focus on general search services that consumers use to navigate the internet and search for information on a range of queries.

This report is the ninth interim report of the Digital Platform Services Inquiry. It will consider the current state of competition in general search services and what has changed, including:

the current state of competition in the supply of general search services
factors influencing the current competitive landscape in the supply of general search services, including international legislative reform and the emergence of new technologies
trends in search quality over time

This report is due to be provided to the Treasurer by 30 September 2024.

See media release.

Final report (March 2025)

The final report is due to the Treasurer by 31 March 2025.

Ministerial direction

Media release

The Hon Josh Frydenberg MP (Treasurer) issued a Ministerial Direction pursuant to

See: Competition and Consumer (Price Inquiry - Digital Platforms) Direction 2020 (Federal Register of Legislation)

This was tabled in the House of Representatives and Senate on 24 February 2020 and is exempt from sunsetting.

It was authorised under s 95H of the Competition and Consumer Act 2010 (Cth).

Pursuant to s 95P(3) of the Competition and Consumer Act 2010 (Cth) the Commission has been directed not to make copies of any interim report available for public inspection until the Treasurer provides written authorisation.

Key provisions are contained in Part 2 of the Direction:

Section 5 Commission to hold an inquiry

(1) Under subsection 95H(1) of the Act, the Commission is required to hold an inquiry into the markets for the supply of digital platform services. The inquiry is not to extend to any of the following:

(a) the supply of a good or service by a State or Territory authority;

(b) the supply of a good or service that is an exempt supply;

(c) reviewing the operation of any Australian law (other than the Act) relating to communications, broadcasting, media, privacy or taxation;

(d) reviewing the operation of any program funded by the Commonwealth, or any policy of the Commonwealth (other than policies relating to competition and consumer protection).

(2) For the purposes of subsection 95J(1), the inquiry is to be held in relation to goods and services of the following descriptions:

(a) digital platform services;

(b) digital advertising services supplied by digital platform service providers;

(i) digital platform service providers; or

(ii) data brokers.

(3) Under subsection 95J(2), the inquiry is not to be held in relation to the supply of goods and services by a particular person or persons.

Section 6 Directions on matters to be taken into consideration in the inquiry

Under subsection 95J(6) of the Act, the Commission is directed to take into consideration all of the following matters in holding the inquiry:

(a) the intensity of competition in the markets for the supply of digital platform services, with particular regard to:

(i) the concentration of power in the markets amongst and between suppliers; and

(ii) the behaviour of suppliers in the markets, including:

(A) the nature, characteristics and quality of the services they offer; and

(B) the pricing and other terms and conditions they offer to consumers and businesses; and

Example: Terms and conditions relating to data collection and use.

(iii) changes in the range of services offered by suppliers, and any associated impacts those changes had or may have on other markets; and

(iv) mergers and acquisitions in the markets for digital platform services; and

(v) matters that may act as a barrier to market entry, expansion or exit, and the extent to which those matters act as such a barrier;

(b) practices of individual suppliers in the markets for digital platform services which may result in consumer harm, including supplier policies relating to privacy and data collection, management and disclosure;

(c) market trends, including innovation and technology change, that may affect the degree of market power, and its durability, held by suppliers of digital platform services;

(d) changes over time in the nature of, characteristics and quality of digital platform services arising from innovation and technological change;

(e) developments in markets for the supply of digital platform services outside Australia.

Section 7 Directions as to holding of the inquiry

(1) Under subsection 95J(6) of the Act, the Commission is directed to do the following in holding the inquiry:

(a) regularly monitor the markets for the supply of digital platform services for changes in the markets, particularly focussing on the matters referred to in section 6 of this instrument; and

(b) give to the Treasurer an interim report on the inquiry by 30 September 2020, and then further interim reports every 6 months thereafter, on:

(i) any changes observed by the Commission in the markets since the last report; and

(ii) any other matter, within the scope of the inquiry, the Commission believes appropriate.

(2) Under subsection 95P(3) of the Act, the Commission is directed not to make available for public inspection, copies of any interim report until the Treasurer, in writing, authorises the Commission to do so.