Why scammers and streamers are in the government’s sights

Excessive tracking and collection of data and so-called “dark patterns” are also expected to be in the regulator’s sights. The latter is an attempt to stop users from being manipulated by interface designs that impede choice and harm consumers. These include being bombarded with pop-ups to make an app or service, such as search, a user’s default.

Australia is out of sync with most of its OECD peers in not having a broad unfair trading prohibition – and in its absence, there have been a rash of scams, fraud and unethical behaviours.

Perhaps more profoundly, the government has agreed to give the ACCC code-making and information-gathering powers to force the big platforms into specific co-regulatory practice codes.

With some litigation taking up to nearly a decade to get through the courts, the codes will give the ACCC a powerful tool to get in front of the digital platforms’ often opaque and technically sophisticated practices.

Ex-ante codes have been employed in the telco and media sectors for years and enable a granular, practical and – most importantly – fast response to digital competition harms.

Many of these are embedded within the “free” services that platforms offer, on a take-it-or leave-it basis, making traditional competition law ineffective.

These include platforms preferencing their own services, pre-installing default agreements that hinder competition, and restricting consumer switching and interoperability.

As the platforms move to tie up smart home devices, AI bots, cloud storage and password and identity management into their ecosystems, the codes promise a far more effective way to regulate platform behaviour.

“One of the things that we’re very conscious of is that it is rare for changes that are made in one jurisdiction to be voluntarily extended in other jurisdictions,” acting ACCC chair Catriona Lowe said.

“So it does matter that we too in Australia have the tools to make sure that we’re getting the balance right. It enables us to set some rules – sensible and balanced rules – that apply to the whole playing field.”

The co-regulatory codes should mark an end to the slow, expensive and largely ineffective wack-a-mole litigation approach the ACCC has had to employ to rein in the big platforms and bring real oversight to the powerful gatekeeper roles the (mostly) US tech giants enjoy.

Treasury has the remit to develop these powers and bring them into practice. Hopefully, not at the snail-like analogue pace its econocrats have typically taken with digital reforms.

When the powerful media companies were pushing for a media bargaining code, Treasury was able to get the new legislative regime in place in less than a year. There is extensive Commonwealth regulatory practice around code-making and – despite the pushback expected from the well-resourced platforms – there should be no reason not to have a similar timetable for these new digital code-making powers.

The issues and harms are not going away, with the Senate economics committee last month again calling for the government to get moving on these digital reforms.

Significantly the committee, led by NSW Liberal senator Andrew Bragg, also called for a new digital platform regulatory “co-ordination” body.

Noting there are specific regimes for airlines, telcos and the banks, the committee said there was a need for a coordinating body that gives consumers certainty about where to turn to when issues arise.

Canberra is still very much organised for the pre-digital era, spreading expertise thinly across multiple portfolios. Regulators readily admit this has created legal gaps which the platforms have been more than willing to exploit. Turf wars over which agency should have remit go on daily, most recently in the scam space.

Government senators lamely pointed to current coordination arrangements as sufficient. Tell that to poor consumers trying to unlock themselves from unused streaming services, on which some are reportedly spending up to $1200 a year. It’s just one of many examples where consumers are left to find a Commonwealth agency willing to help them.

The issue is well understood by ministers but sits in the too-hard basket. Regulatory agencies and their portfolio departments are deeply resistant to any fundamental change that would consolidate policy and regulation in the most important of economic sectors and in turn lead to their extinction. A case of government interest trumping citizen interest, yet again.