The Australian Competition and Consumer Commission (ACCC) has concluded its five-year Digital Platform Services Inquiry with a final report emphasising the urgent need for targeted regulation to address ongoing consumer harms and anti-competitive practices in digital markets.

ACCC Chair Gina Cass-Gottlieb said current competition and consumer laws cannot adequately address the significant harms created by digital platform services, despite their economic benefits and importance to Australian consumers and businesses.

The inquiry found that 72% of Australian consumers surveyed encountered potentially unfair practices when shopping online, including accidental subscriptions, hidden fees, and manipulative design practices that direct users toward more expensive options.

“An unfair trading practices prohibition is required to protect consumers from these kinds of tactics, both online and offline,” Cass-Gottlieb said.

The ACCC recommends establishing an economy-wide unfair trading practices prohibition to address these issues.

Additionally, 82% of survey respondents agreed on the need for a specialised independent external dispute resolution body for digital platform services, particularly benefiting small businesses dealing with fake reviews, account deactivations, or platform access issues.

The five-year inquiry identified anti-competitive conduct by major digital platforms, including denying interoperability, self-preferencing, exclusivity agreements, impeding switching, and withholding access to important hardware, software, and data inputs.

“A lack of competition in digital markets can lead to higher prices, less choice, lower quality, or even greater harvesting of personal data, ultimately impacting everyday users,” Cass-Gottlieb explained.

The ACCC supports establishing a new digital competition regime, noting that several jurisdictions, including the European Union, the United Kingdom, Germany, and Japan, have already introduced similar regulations to improve digital market competition.

The report highlighted potential competition risks in rapidly evolving sectors, including cloud computing and generative AI.

Major cloud providers Amazon, Microsoft, and Google are described as vertically-integrated platforms that may bundle services anti-competitively across different technology layers.

“Vertically-integrated cloud providers may be incentivised to engage in conduct that could harm their competitors,” Cass-Gottlieb said, noting concerns about bundling practices affecting generative AI development and deployment.

The inquiry found that generative AI developers require significant cloud computing power, creating potential for anti-competitive bundling or self-preferencing by cloud providers offering competing AI products.

In December 2023, the Government accepted ACCC findings that existing competition provisions are insufficient to address current and future competition harms, supporting the development of a new digital competition regime in principle.

Government consultation on implementing the new digital competition regime began in December 2024, following ACCC recommendations for service-specific mandatory codes of conduct for designated digital platforms.

The inquiry examined various digital platform services, including online messaging, app marketplaces, search services, retail marketplaces, social media, and data services over the five-year period from 2020 to 2025.

“It is timely to progress a new digital competition regime in Australia, which will increase contestability, benefit both local and foreign companies that rely on access to these platforms to conduct business in Australia, and support a growing economy,” Cass-Gottlieb concluded.

The comprehensive regulatory approach aims to protect consumers while fostering innovation and competition in Australia’s increasingly digital economy.