ACCC welcomes consultation on new digital competition regime

The ACCC has welcomed today's start of consultation by the Australian Government on the implementation of a new digital competition regime in Australia.

The consultation comes after the Government's in-principle agreement to competition reforms recommended by the ACCC to address harms caused by digital platforms.

"This is an important opportunity for consumers, businesses and other interested parties to help shape the future of digital platforms competition in Australia," ACCC Commissioner Peter Crone said.

"Digital platforms are some of the largest and most powerful companies in the world and we rely on them as we go about our lives every day. They have also become inescapable partners for many small and medium businesses, and are essential to the functioning of our economy."

"New measures are needed to ensure these powerful platforms don't misuse this position to stymie competition at the expense of the businesses and consumers that rely on them," he said.

The ACCC has worked closely with the Treasury to develop the proposed framework, including the key features of a new digital competition regime.

"Greater competition in digital platform markets should bring benefits to Australian consumers like more choice in products and services, better transparency and increased innovation," Mr Crone said.

Regulating digital platform services critical to the Australian economy

The proposed framework if introduced would bring new, upfront service-specific obligations on certain 'designated' digital platforms that provide specific services. These requirements would complement enforcement of existing competition law.

The ACCC has consistently highlighted concerns about competition in digital markets in several reports produced through its 5-year Digital Platform Services Inquiry, which concludes in March 2025.

"We agree with the Treasury that the competition issues arising in app marketplaces and ad tech services are priority concerns," Mr Crone said.

For example, new obligations imposed under the new framework could prevent app marketplaces from requiring developers to use their proprietary in-app payment systems, which often include commission fees of up to 30 per cent of every in-app digital transaction.

The new regime could also address the lack of transparency over policies and processes governing app reviews and approval, and app marketplaces restricting developers from communicating directly with consumers about alternative ways to make digital purchases outside of apps.

"We are confident that these new measures could also deal with practices where app marketplace providers give unfair advantages to their own apps and other products, such as preferential treatment in app marketplace search result rankings," Mr Crone said.

The ACCC has also previously identified significant issues in the supply of ad tech services in Australia. For example, the ACCC's 2021 Digital Advertising Services Inquiry expressed concern with Google giving more favourable treatment to its own ad tech services, restricting the supply of certain ad inventory to users of its other services, and not providing sufficient transparency about how its ad tech services work, limiting informed decision making.

Making sure Australia is not left behind

The proposed regime is directionally similar to reforms already being implemented or proposed in many international jurisdictions including the European Union, the United Kingdom, Japan and India.

"This is an opportunity to build on the progress made overseas and by introducing similar changes here, it will help ensure Australian businesses and consumers aren't left behind," Mr Crone said.

"We believe the proposed regime will be fit-for-purpose for Australia while being complementary to and cohesive with international approaches."

"These proposed reforms are important in not only addressing current concerns with anti-competitive conduct by the largest digital platforms, but they should also help ensure more competition in the supply of future technologies and services," Mr Crone said.

More information about the consultation is available on the Treasury's website and submissions can be made to [email protected] by 14 February 2025.

Background

The ACCC has examined competition and consumer issues regarding digital platforms in Australia since 2017. In September 2022, the ACCC made significant recommendations in our fifth Digital Platform Services Inquiry report that a new digital competition regulatory framework was needed to protect Australian consumers and businesses.

In December 2023, the Government accepted the ACCC's findings that existing competition provisions by themselves are not sufficient to address current or potential future competition harms and supported-in-principle the development of a new digital competition regime.