Katarina Klaric, Principal, Stephens Lawyers & Consultants[i]
The Australian Competition and Consumer Competition (ACCC) has spent the last 8 years examining digital markets with the publication of 14 reports[ii]. These reports have identified existing competition and consumer issues in digital markets requiring regulation and have recommended regulatory reforms, which are still to be implemented. The reforms include the introduction of economy wide prohibition on unfair trade practices and strengthening unfair contract terms laws, mandatory processes for the removal of scams, harmful apps and fake reviews, the establishment of an independent external dispute resolution body for resolving complaints with digital platforms and specific codes of conduct targeting anti-competitive practices. Codes of Conduct allow for a flexible approach to the regulation of these markets having regard to their dynamic and evolving nature[iii].
The ACCC monitors international regulatory developments in the European Union implementation of the Digital Markets Act and Digital Services Act, United Kingdom, Japan and other countries with respect to digital markets and on-line digital services and the effectiveness of these regulations in addressing anti-competitive conduct and unfair and harmful practices on-line. The ACCC has sought to leverage on the experiences of other countries and how these can be utilised to support regulatory reforms in Australia.
With on-line digital markets rapidly evolving with the development of new technologies, including AI tools and AI services, the ACCC in its final report released on the 23 June 2025 has identified a number of developments and emerging issues in digital platform markets which need monitoring.
What are the current issues in digital markets?
In Australia, digital platform markets are dominated by a number of large providers – Google, Apple Meta (Facebook) Microsoft and Amazon – with substantial market power. These companies have significant financial resources and are able to protect their market power through exclusionary conduct and acquiring potential competitors[iv].
Anti-competitive conduct
The ACCC, in the course of its inquiries into digital markets, has observed anti-competitive conduct by digital platforms including[v] :-
- Self-preferencing by giving more favourable treatment to their own products or services over those of other suppliers utilising their platform;
- Tying arrangements by which the purchase of products or services on the digital platform is conditional on the purchase or use of another product or service, which the platform supplies. ACCC has concerns about the conduct of Apple and Google in tying the supply of app store services to use of their in-app payment system, and the tying of pre-installation of their app stores to the pre-installation of other apps they offer.
- Exclusivity Agreements whereby platforms have their services exclusively pre-installed on devices or do not allow default settings to be changed. ACCC also has concerns about digital markets platforms, which restrict business users from providing their products or services through other distribution channels.
- Impeding Consumer Switching through the use of user interfaces or other arrangements which inhibit or limit consumer choice or a business user’s ability to communicate alternative payment options to its users. ACCC is specifically concerned about conduct by app store, mobile operation system and search providers.
- Restrictions on interoperability imposed by digital platforms which deny or restrict access to the platforms’ technical information and data for the development of apps or software which is operable with the platforms’ services. The ACCC is concerned about the restrictions on interoperability imposed by platforms that affect third party app developers, browser engines and app stores.
- Lack of Transparency by digital platforms over pricing, on-line auction processes, terms of service, processes and systems used in the supply of products or services, algorithms and AI tools used in the supply of products or services and in decision making processes and performance levels of services supplied. The ACCC has raised concerns about the lack of transparency in App market places in relation to the processes and policies used by Apple and Google in the app review and approval process. This can lead to increased costs in app development and impact on developer’s incentive to invest and innovate[vi]. The ACCC has also raised concerns about the lack of transparency of Google in providing ad services including pricing of ad-words, auction process and bid and ad performance information[vii].
- Lack of Data Accessibility and Portability can be a substantial barrier to entry and expansion of the supply of some digital platform services including search and ad tech services market. The ACCC considers that its concerns in these markets can be addressed by specific codes which address data related barriers to market entry. However, privacy and security risks have to be appropriately managed before data accessibility and portability obligations can be introduced[viii].
Unfair Trade Practices
| ACCC survey found that 72% of the consumers surveyed who had used an online retail marketplace in the previous 12 months had encountered a potentially unfair practice
[ACCC|Digital platform services inquiry|Final Report,4-5] |
The ACCC’s enquiries into digital market platforms identified unfair trading practices of platforms that negatively impact or harm consumers and businesses, including[ix]–
- Business practices which make it difficult for consumers or businesses to exercise their contractual or other rights when dealing with digital market platforms. Examples of such practices include:
- Digital platforms making it difficult for users to cancel a subscription service after a free trial, resulting in the service being extended as a paid service, which users do not utilise or do not want and cannot cancel.
- Digital platforms not having adequate complaint handling and dispute resolution processes in place within Australia, to address complaints or disputes concerning products or services, suspension or termination of user accounts, scams, negative fake reviews and harmful apps. Many digital platforms are utilising AI generated responses to complaints lodged by consumers or business users, which do not address the issues and frustrate users.
- Business practices involving the use of lengthy terms and conditions for supply of products or services and privacy policy. These are presented to consumer or business users on all-in or nothing basis, with the users having no choice but to accept the terms and conditions and privacy policy if they wish to purchase the product or service. A survey undertaken by the Office of the Australian Privacy Commission (OAIC) found that only 31% of Australian read on-line privacy policies[x].
- Excessive tracking and collection and use of consumer data – Australian consumers are concerned about the extent of collection, use and disclosure of personal data collected by digital platforms – such as what consumers do and say on-line and how they transact[xi]. The information that is collected by digital platforms often is not relevant to the transaction. Consumer data is being used for profiling and targeted marketing, exposing vulnerable consumers to manipulation, discrimination and exclusion. Consumer data is also being used to train AI models.
| ACCC Survey found that 83% of the consumers surveyed were of the view that companies should seek their consent before using their data to train AI modes
[ACCC|Digital platform services inquiry|Final Report, 13] |
- Confusing design of user interfaces on digital platforms or dark patterns. The ACCC has identified and classified a number of practices as dark patterns, which are intended to manipulate, exploit or pressure consumers when transacting on digital platforms. These include use of:
- user interface designs that frame or give prominence to options that benefit the platforms,
- false scarcity warnings such as – “low on stock”,
- use of false or inadequate count down timers for transaction completion,
- pre-selected add-ons.
Recommended Regulatory Reforms to competition and consumer protection laws
The ACCC has recommended regulatory reforms to Australia’s competition laws to protect and promote competition in digital markets including the introduction of mandatory codes of conduct which would apply to designated digital platforms dealing with specific competition law issues[xii]. The Government is undertaking a consultative process on the proposed approach to the implementation of a new digital competition regime, which is to be administered by the ACCC.
The ACCC also recommended the introduction of a number of measures for the protection of consumers and businesses including new economy wide laws prohibiting unfair trade practices[xiii] and specific consumer protection laws targeted at digital platforms[xiv]. The reforms specific to digital platforms include –
- mandatory processes to prevent and remove scams, harmful apps and fake reviews;
- mandatory internal dispute resolution standards that ensure accessibility, timeliness, accountability, the ability to escalate a dispute to a human representative and transparency.
- The introduction of an independent external ombudsman scheme that consumers and businesses can access in respect of complaints and disputes involving digital platforms.
The recommended reforms are still to be implemented in Australia. The Australian government has been undertaking consultative processes in relation to the proposed amendments to the Australian Consumer Law prohibiting unfair trading practices and the design of the unfair trading protections for small business.
In relation to the development of internal and external dispute resolution requirements for digital platforms, the Government is undertaking further work on these requirements. As a first step, the Government called upon industry to develop voluntary dispute resolutions standards[xv].
What are the emerging issues in digital markets
With the rapid development and evolution of digital markets growth and the use of generative AI and the uptake of cloud computing services, the ACCC in its final report on digital platform markets has recommended that the ACCC continues to have monitoring functions of emerging digital technologies and how these impact on competition and consumers. The ACCC has also recommended that other government agencies should continue to monitor emerging technologies for their impact on privacy, security, sustainability and labour market issues[xvi].
Generative AI
| ACCC survey indicated that 96% of consumers surveyed aged 14 and older had at least one concern about generative AI including misuse by scammers, personal privacy and creation of harmful content.
[ACCC|Digital platform services inquiry|Final Report, 15] |
The recent developments in and the rapid adoption of generative AI technologies in Australia is being closely monitored by regulators for risks associated with anti-competitive conduct, unfair trade practices, dissemination of false or misleading information, privacy and on-line safety.
Generative AI systems utilise Large Language Models (LLM) to create content including text, images, audio, video or data, in response to plain language prompts or queries entered by a user. These systems adopt a machine learning approach in analysing large datasets to generate new outputs. The development and ongoing maintenance of these systems requires significant financial investment, access to large datasets and computing resources including cloud storage facilities. These can create barriers to entry for new market participants, enabling existing large digital platforms to expand their market dominance by the use of AI technologies and LLMs[xvii].
The ACCC has identified a number of competition and unfair trade practices issues that could result from the use of generative AI:-
- The use of AI systems to facilitate anti-competitive practices including self-preferencing, tying and data access restrictions[xviii].
- The use of algorithms in digital markets to facilitate collusive or cartel behaviour including price fixing, determining bids for on-line auctions and sharing markets.
- The use of AI tools to generate misleading advertising, scams and fake reviews[xix].
Digital markets for cloud computing
In the cloud computing services market, the major providers in Australia are Amazon Web Services (AWS), Microsoft, Google, Oracle and IBM. These providers have significant financial resources and substantial market power and are able to offer their services on a take it or leave it basis, with consumers of businesses not being able to negotiate terms or prices for the services offered. The cloud services are often bundled, resulting in consumers or businesses having to accept services or products that they do not need, adding to their costs.
Existing and Emerging issues concerning cloud service providers include[xx]:
- Unfair trade practices including terms upon which cloud services are offered or provided.
- Anti-competitive conduct including bundling, tying or self-preferencing.
- Access to data on termination or expiry of the agreement and the costs of extraction of the data and migration to another platform.
- Lock in agreement which make the cost of switching providers costly, thus reducing competition.
- Access to data on early or wrongful termination of the cloud services agreement.
- Inadequate mechanism for resolution of disputes, particularly where the cloud service provider is located outside Australia and use AI tools to respond to complaints including legal letters.
Digital markets for online gaming
In Australia, digital platforms are one of the largest suppliers or distributors of online gaming services. Video games are accessible via digital platforms such as – Microsoft’s Xbox, streaming services like Amazon’s Twitch and app stores such as Apple App Store and Google Play Store. The ACCC has identified a number of current practices in the online gaming market, which potentially may be anti-competitive or involve unfair trade practices. These include[xxi]–
- Interoperability concerns relating to the ability to play online games across platforms;
- The licensing arrangements for consumer access to online games via an online subscription service. These agreements are lengthy, contain restrictions and limitations which may be unclear and consumers may not understand or be adequately informed that they are not buying permanent access or ownership of the game;
- The use of manipulative or deceptive design elements in on-line games or their promotion which may cause users to make unintended purchases including in-game purchases;
- The use of representations that the products can be obtained “for free” through extended game play, when it is virtually impossible;
- The lack of transparency about the probability of “loot boxes”, “treasure chests” or “mystery boxes” that players can purchase within an on-line game containing rewards or rare items.
Conclusion
With on-line digital markets rapidly evolving with the development of new technologies, including AI tools and AI services, new issues will be emerging, challenging regulators not only in Australia but globally. The regulatory framework must be adaptable to deal with evolving technological landscape and provide consumers with a quick and affordable mechanism to resolve a dispute with a digital platform. Urgent regulatory reforms are required to mandate Digital platforms to have human representatives within Australia to deal with complaints and disputes. Without such reforms, Digital platforms will continue to frustrate consumers and businesses with genuine complaints, by the use of AI generated responses which do not deal with issues.
Disclaimer : This article is not intended to be a substitute for obtaining legal advice.
Authored by Katarina Klaric, Principal, Stephens Lawyers & Consultants. © Stephens Lawyers & Consultants, 2024 – 2025 [*This article is based on a paper presented by Katarina Klaric as a part of a panel discussion at the IBA Annual Conference Mexico- 4 September 2024]
For further information contact:
Katarina Klaric, Principal
Stephens Lawyers & Consultants
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[i] This article is based on a paper presented by Katarina Klaric as a part of a panel discussion at the IBA Annual Conference Mexico – 4 September 2024.
[ii] Digital platform services inquiry. Final report -March 2025, ACCC. (ACCC Final report – March 2025), Released and published by the ACCC on 23 June 2025.
[iii] Ibid. Also see, Digital platform services inquiry. Interim report No. 5- Regulatory Reforms –September 2022, ACCC, p11.
[iv] Ibid, p2. Also see, Digital platform services inquiry. Interim report No. 5- Regulatory Reforms –September 2022, ACCC, p7
[v] Digital platform services inquiry. Interim report No. 5- Regulatory Reforms –September 2022, ACCC, p12-13. Also, see ACCC Final Report, p6.
[vi] Digital platform services inquiry. Interim report No. 5- Regulatory Reforms –September 2022, ACCC, p174- 175.
[vii] Digital platform services inquiry. Interim report No. 5- Regulatory Reforms –September 2022, ACCC, p174-177.
[viii] Digital platform services inquiry. Interim report No. 5- Regulatory Reforms –September 2022, ACCC, p165-174.
[ix] Digital platform services inquiry. Interim report No. 5- Regulatory Reforms –September 2022, ACCC, p46, 64-68. Also, see ACCC Final Report, p4-5
[x] OAIC, 2020 Australian Community Attitudes to Privacy Survey, September 2020, p69.
[xi] OAIC, 2020 Australian Community Attitudes to Privacy Survey, September 2020, p29-31.
[xii] Digital platform services inquiry. Interim report No. 5- Regulatory Reforms –September 2022, ACCC, p108 (Recommendation 3) and p123 (Recommendation 4). Also see ACCC Final Report, Recommendation 3 and 4 , p20-21.
[xiii] Digital platform services inquiry. Interim report No. 5- Regulatory Reforms –September 2022, ACCC, p46, 64-68, (Recommendation 1).
[xiv] Digital platform services inquiry. Interim report No. 5- Regulatory Reforms –September 2022, ACCC, p46, 64-68, (Recommendation 2). Also see ACCC Final Report, Recommendation 1 and 2 , p19-20.
[xv] ACCC Final Report, p21. Government response to Recommendations.
[xvi] ACCC Final Report, Emerging services and technology need continued scrutiny. pp13-17, Recommendation 5, p22
[xvii] ACCC, Digital Platform Services Inquiry – March 2025 – Final Report, Issues Paper. P14-15.
[xviii] ACCC, Digital Platform Services Inquiry – March 2025 – Final Report, Issues Paper. P15.
[xix] https://dp-reg.gov.au/digital-platform-regulators-forum-2024-communique.
[xx] ACCC, Digital Platform Services Inquiry – March 2025 – Final Report, Issues Paper. P12-14.
[xxi] ACCC, Digital Platform Services Inquiry – March 2025 – Final Report, Issues Paper. P11-12.