online regulation

Australian competition authority calls for holistic regulation of online platforms

John MacKenziePosted by

The Australian Competition and Consumer Commission has joined the growing number of government bodies calling for greater regulation of the online world. We have already commented on the Regulation of online falsehoods, looking at the UK, Singapore and Europe.

Content aggregation platforms

The inquiry looked at the effect that digital search engines, social media platforms and other digital content aggregation platforms have on competition in media and advertising services markets. In particular, the inquiry looked at the impact of digital platforms on the supply of news and journalistic content and the implications of this for media content creators, advertisers and consumers.

According to the report the dominance of the leading digital platforms and their impact across Australia’s economy, media and society should be addressed with significant, holistic reform.

Competition law concerns

Report was wide ranging, and covered substantive competition law concerns as well as consumer issues. The ACCC recommended changes to Australia’s merger laws so that the effect on potential competition was considered. The importance of data in any merger should also be considered.

Interestingly the the use of click-wrap agreements and take it or leave it terms was also considered. There is a concern that that current privacy policies offer consumers the illusion of control but instead are almost legal waivers that give digital platforms’ broad discretion about how they can use consumers’ data.

Effective online dispute resolution

In the context of online scams, but of relevance to any online dispute, the ACCC was concerned with an absence of effective dispute resolution. The ACCC called for minimum standards to be applied.

Like the UK, in the event that complaints or disputes are not solved internally, the ACCC also recommended that an ombudsman have the power to investigate complaints. Powers would also include the power to order take down of content where appropriate; and order compensation in appropriate cases. The remit of the ombudsman was seen to be broad and could include:

  • complaints or disputes relating to the purchase of advertising services from digital platforms;
  • complaints or disputes concerning representations about the performance or likely performance of purchased advertising to be inaccurate or unsubstantiated;
  • complaints or disputes from consumers, including in relation to scams and the removal of such content.

Minimum standards for dispute resolution

The ACCC also recommended the development of minimum standards for dispute resolution.

Those standards “should, among other things, set out requirements for the visibility, accessibility, responsiveness, objectivity, confidentiality and collection of information of digital platforms internal dispute resolution processes. They should also set out the processes for continual improvement, accountability, charges and resources.

All digital platforms that supply services in Australia, and have over one million monthly active users in Australia, will be required to comply with the standards. Once published, relevant digital platforms will have six months to comply with the standards. Breaches of the standards would be dealt with by the ACMA, which will be vested with appropriate investigative and information gathering powers and the capacity to impose sufficiently large sanctions for breaches to act as an effective deterrent.

The setting of standards, and sanctions for failing to comply with those standards, is what is likely to cause significant concern for growing businesses. The giants like Facebook, Twitter, Snapchat and Instagram are already working hard to build transparent online dispute resolution processes. But a limit of 1 million monthly users in a territory is a relatively low threshold. For site like Koofers.com, which says it has 1.6million students using it, do they need to build a visible, accessible, online dispute resolution platform for issues with and disputes about (for example) ratings of professors?

Universal process for dispute resolution

Unless a universal dispute resolution process is created and adopted for use around the world, it is highly likely that regulators will continue to press for a process to be incorporated into online platforms. Even if the regulators recognise that there should be a threshold, such as 1m active users, it would be prudent for those building these platforms to be thinking about their dispute resolution process from the outset. We would be delighted to help with that thinking.

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