ACCC’s 2022-23 compliance and enforcement priorities for technology and the digital economy

By Ben Hamilton and Gabrielle Fee

Consumer and fair trading issues relating to advertising and marketing practices in the digital economy, and competition and consumer issues relating to digital platforms are among the enforcement and compliance policies on the Australian Competition and Consumer Commission’s (ACCC) radar for 2022-23.

ACCC Chair Rod Sims outlined the ACCC's priorities at an address to the Committee for Economic Development Australia last week.

Among other matters, the ACCC has specifically addressed developments in the technology and digital economy sector.

Consumer and fair trading issues relating to manipulative or deceptive advertising and marketing practices in the digital economy

The ACCC expressed the view that a well-functioning online market is key to a modern economy.

Consumers are facing a growing number of manipulative or ‘dark pattern’ techniques on the online market, which aim to exploit or pressure them. These techniques include false scarcity reminders, false sales countdown timers, targeted advertising to exploit consumers’ individual characteristics, pre-selected add-ons and design interfaces which discourage unsubscribing.

While the ACCC has been successful in recent proceedings, including against Trivago for its misleading manipulation of search results, and against Google for misleading consumers in relation to its collection of personal data, it has indicated that it will continue to focus on enforcement action against companies that are engaging in these concerning practices.

Finally, the ACCC considers that the introduction of a prohibition on unfair practices, to apply economy wide, is necessary to ensure consumers are not harmed by such practices and to address other manipulative practices across the economy.

Competition and consumer issues relating to digital platforms

The ACCC has confirmed that it will continue enforcement action for breaches of the CCA and ACL through digital platforms, particularly relating to payments, search, apps and adtech. It is also increasingly concerned about the ability of enforcement proceedings to adequately address the systemic competition and consumer concerns that it has identified in digital platform markets.

The investigation and regulatory procedures open to the ACCC in enforcement proceedings in the digital platform markets are not fit for purpose. The ACCC expressed a concern that it faces the challenge of often having to narrow the allegation and ignore broader concerns with conduct, effectively engaging in a ‘whack a mole’ strategy, where it may remedy one manifestation of anti-competitive conduct while even more problematic conduct surfaces elsewhere.

Consequently, the ACCC is considering the need for further regulatory tools, and has recently released a Discussion Paper on various options for the digital platform services. This topic will be the subject of a report the ACCC will provide to the Treasurer in September this year, and the reforms which are considered in that report will address consumer protection as well as competition concerns. The preliminary options for reform identified have drawn heavily from overseas proposals, including the US, European Union, UK and Germany.

The ACCC has noted that although the recommendations will reflect the best course for Australian consumers and businesses, it is aware of the benefits of global alignment for all stakeholders and is working internationally to help achieve this.