Government Senators' additional comments
1.1Government senators provide these additional comments recognising the sufficient exploration of the policy issues and evidence in the majority committee report.
1.2We extend our thanks to all submitters and witnesses to this inquiry. This has been a broad inquiry, and the expertise and views provided to the inquiry are appreciated.
1.3It is evident that digital platforms need to better address their market power, influence, and conduct. Regrettably, many digital platforms are resistant to meeting the expectations of the public and policy makers. It is important that digital platforms consider consumer and market impacts of their operations and remedy clear issues when they are presented with them.
1.4Government senators are of the view that a whole of government response to the regulation of digital platforms is the most efficient way to address digital platforms power, influence and wide impact on the economy and consumers.
1.5Importantly, this whole of government response is already underway. Significant reforms are being progressed by the government through the Australian Competition and Consumer Commission’s (ACCC) Digital Platform inquiries and the Attorney-Generals’ Review of the Privacy Act 1988 (Privacy Act). Other initiatives from across government portfolios complement these reforms.
1.6Regulation of digital platforms is a policy matter being addressed globally, and it is important reforms pursued domestically—where appropriate — align with developments internationally. Government senators are of the view that lessons from overseas should be considered and applied to reforms in Australia as part of the whole of government approach.
1.7Government senators look forward to further reforms being progressed that regulate the conduct of digital platforms, particularly with the protection of consumers in mind.
1.8Since coming to government, reforms have been progressed that go to the heart of the challenge of regulating digital platforms—protecting consumers, modernising existing laws and regulations, and acting collaboratively with industry to address issues. Some of these significant reforms include:
Consultation on the ACCC’s Digital Platforms Services regulatory reform recommendations.[1]
Modernising the Privacy Act including consultation on the outcomes of the Attorney-General’s Department’s Review of the Privacy Act.[2]
Consultation on an exposure draft bill to provide the Australian Communications and Media Authority (ACMA) with new powers to hold the digital platforms to account and improve efforts to combat harmful misinformation and disinformation.[3]
Increasing funding for the eSafety Commissioner and the Office of the Australian Information Commissioner to support their work regulating digital platforms activities.[4]
A ban on unfair contract terms which came into effect on 3 November 2023, a recommendation of the ACCC.[5]
Consultation on options to address unfair trading practices, a recommendation of the ACCC.[6]
Consultation on the ‘Supporting responsible AI’ discussion paper and commitments from the Hon Ed Husic MP, Minister for Industry and Science to 'work with the international community to ensure AI is developed with the right guardrails in place'.[7]
Consultation and subsequently the announcement of the Strategic Plan for Australia’s Payments System.[8]
A Prominence Framework to support access by consumers to free-to-air television services on connected television devices.[9]
Consultation on strengthening the Basic Online Safety Expectations (BOSE) Determination established under the Online Safety Act 2021, including the best interest of the child being a primary consideration for all services used by children.[10]
Industrial relations reform in the Fair Work Legislation Amendment (Closing Loopholes) Bill 2023 which addresses ‘gig economy’ workers who work through digital platforms.[11]
An industry code of practice for dating platforms as an outcome of the National Roundtable on Online Dating Safety.[12]
Reform to the National Classification Scheme to reflect the modern media environment as well as updated Guidelines for the Classification of Computer Games.[13]
Involving technology companies in the Australian Government Digital Identity System (AGDIS) consultation.
1.9While there are existing competition, consumer, corporation, taxation, privacy, online safety laws as well as recent reforms made by the government that provide further consumer and market protections, work on the whole of government approach to reforms should continue in order to keep pace with technological developments.
1.10This Senate Economics Reference Committee Inquiry has significant parallels to the findings and recommendations of the ACCC’s inquiries, which are being consulted on and developed by the government, and the Review of the Privacy Act which is also being implemented by the government.
1.11Government senators are of the view the government should continue to prioritise the findings and recommendations of the ACCC and the Privacy Act Review, a sentiment shared by many witnesses to the inquiry.
1.12Government senators are of the view that the government should also continue to understand and learn from regulation pursued in other jurisdictions, and integrate this with domestic regulation where appropriate.
1.13Government senators provide the following commentary on the recommendations included in the majority committee report.
The committee recommends that the Australian Government establish a digital platforms coordination body.
1.14Evidence to the committee was clear that the four key regulators of the digital platforms—ACCC, eSafety Commissioner, ACMA, Office of the Australian Information Commissioner Information—meet regularly and share their knowledge, work, and priorities for the benefit of each regulator.
1.15Together, their work as the Digital Platform Regulators' Forum (DP-REG) facilitates collaboration, knowledge sharing and a greater consideration of how existing and emerging competition, consumer, privacy, safety, and data issues interact and could be addressed.
1.16This coordination is already happening, and it complements the whole of government approach the government is taking while recognising the requirements for the regulators to maintain their independence and pursue their respective responsibilities and priorities.
1.17Government senators are of the view that it is unclear what a coordination body would add when there already exists cross-government coordination. It is also unclear how the regulators’ independence could be managed from a legal perspective given they are established by statutes as independent agencies with different responsibilities.
1.18Acknowledging this, there are always merits in further collaboration between the departments, agencies and regulators that oversee digital platforms which should be considered.
1.19In considering options to increase alignment, the government should also explore opportunities to incorporate the learnings and experiences of international counterparts as well.
1.20Similarly, if pursued, the government should appropriately facilitate the involvement of third parties in such a body to represent the views of consumers, workers, and industry in the coordination of digital platform regulation.
The committee recommends that the Australian Government introduce legislation to prevent anti-competitive practices through the bundling of payment services and products by large digital platforms.
The committee recommends that the Australian Government require mandatory disclosure by large digital platforms of self-preferencing conduct.
1.21The ACCC’s Digital Platforms Inquiry between 2017 and 2019 and the Digital Platform Services inquiry from 2020 until 2025 is the most significant Australian inquiry into online platforms to date. This industry analysis, consultation, engagement with stakeholders and institutional understanding of how consumers and competition laws are enforced and applied to digital platforms are significant.
1.22The ACCC’s fifth interim report ‘Digital platform services inquiry— September 2022 interim report— Regulatory reform’ recommended regulatory options to address the harms that digital platforms can have to consumers, competition, and small business.
1.23The ACCC is clear that they consider the bundling of products and services, self-preferencing, impediments to consumer switching and interoperability, and exclusive pre-installation and default arrangements, among other conduct by the digital platforms, as potentially anti-competitive.
1.24Importantly, the ACCC have recommended that the government consider options to address these issues through a code framework that can be assessed clearly and objectively, and with industry and stakeholders to ensure it targets specific competition issues.
1.25The Treasury has commenced consultation on the recommendations in the ACCC’s fifth interim report to seek views and options for regulatory reform. The government is considering the ACCC’s recommendations, undertaking consultation , and has a view to ensuring Australia maintains a competitive and well-regulated digital economy.
1.26Government senators note that in progressing ACCC recommendations, it is important that instances of anti-competitive practices that cause consumer detriment and harm are prioritised.
1.27These competition and consumer issues presented by the digital platforms are being addressed globally.
1.28In the European Union, the Digital Markets Act (DMA) addresses market power and the Digital Services Act (DSA) addresses digital platforms’ services.
1.29Digital platforms operate globally and bring consumers together in a global marketplace. While there remains a sovereign responsibility to regulate in the national interest and in the interest of domestic consumers and markets, the challenge of addressing the powers and influence of digital platforms also remains a global challenge .
1.30Government senators believe it is important that the government collaborate with and look to the world’s initiatives to further regulate in accordance with international developments.
The committee recommends the Australian Government implement mandatory dispute resolution requirements for large digital platforms via regulation.
The committee recommends the Australian Government establish a tribunal for small disputes with digital platforms.
1.31Recommendations 4 and 5 both address dispute resolution and have been considered together.
1.32The ACCC recommended targeted measures to protect users, including through a mandatory process for dispute resolution to be established internally by the digital platforms. They recommended accessibility, timeliness, accountability, having the ability to escalate to a human, and transparency as critical features of such a scheme.
1.33Government senators are strongly of the view that consumers must have access to internal dispute resolution services and that regulators are empowered to ensure dispute resolution services of the digital platforms are effective and meet consumer expectations.
1.34Government senators look forward to the government progressing reforms on this important aspect of consumer protection, a recommendation of the ACCC and consulted on by Treasury.
1.35Consideration of the best options for a potential external dispute resolution scheme should follow consideration of internal dispute resolution requirements and oversight processes to ensure that consumers have access to adequate internal dispute resolution as a priority.
The committee recommends the Australian Government implement a requirement for designated digital platforms to report advertising material via a public register, based on turnover, and that it implement mandatory reporting on algorithm transparency, data collection and profiling by very large platforms, particularly identifying what personal data is collected and how it is used.
1.36Transparency is an important regulatory tool that governments should utilise to impose obligations and operational changes to digital platforms. When digital platforms need to be open, accountable, and transparent their systems and services improve.
1.37Some digital platforms do not recognise the need for regulations such as these, assert that self-regulation is an appropriate and sufficient approach, and avoid compliance with regulations, and fail to provide the level of transparency the community expects.
1.38The merits of this recommendation and its usefulness should be considered in conjunction with other information gathering and reporting obligations that are already imposed on platforms.
1.39Consideration should also be given to opportunities to extend or develop powers that already exist such as the compulsory information-gathering powers under section 155 of the Competition and Consumer Act 2010.
1.40The Government is now considering refinements to the proposed Combatting Misinformation and Disinformation Bill based on the public consultation and submissions that were made, and a bill is expected to be introduced in 2024.
1.41Government senators look forward to the implementation of this bill and believe it will improve transparency about what digital platforms are doing in relation to misinformation and disinformation, including the systems and processes that platforms have in place.
1.42Importantly, these reforms from the government will build on and strengthen obligations in the voluntary disinformation code from the Digital Industry Group Inc. (DIGI) which launched in 2021.
1.43Driving transparency is an important part of Australia’s online safety approach. The Basic Online Safety Expectations (BOSE) Determination, established under the Online Safety Act 2021, sets out the Government’s minimum safety expectations of online service providers for protecting Australian users. In November 2023, the Minister for Communications announced consultation to strengthen the BOSE Determination, to ensure these protections are fit-for-purpose in a rapidly evolving online environment.[14]
The committee recommends that the Australian Government regulate an individual’s right to delete personal data.
The committee recommends the Australian Government legislate for mandatory industry codes on the collection, use and retention of children’s data.
1.44The review by the Attorney-General’s Department of the Privacy Act 1988 was instigated by the ACCC’s 2019 Digital Platforms Inquiry final report and commenced by the previous government in 2020.
1.45This work was not completed by the previous government and has since been progressed by the Labor Government. On 28 September 2023, the government agreed or agreed in-principle to the majority of the review’s recommendations.
1.46The government is now progressing the implementation of these reforms, conducting impact analysis, working with stakeholders and considering transition periods for legislative reform.[15]
1.47Notably, in pursing privacy reforms ahead of the review being finalised, the government secured passage of legislation in the parliament to significantly increase penalties for repeated or serious privacy breaches. The Attorney-General stated that 'Companies which fail to take adequate care of customer data will face much higher penalties'. This is an essential factor of the legislative framework that is being progressed to ensure that companies and platforms have an obligation to protect their users’ data.
1.48Government senators note the government has agreed in-principle as part of the Privacy Act Review that individuals should have greater transparency and control over their personal information, particularly a right to:
Request an explanation of what personal information is held and what is being done with it through an enhanced right to access.
Challenge the information handling practices of an entity and require the entity to justify how its information-handling practices comply with the Privacy Act.
Require an entity to delete (or de-identify) personal information through a right to erasure.
Request correction of online publications over which an entity has control.
Require search engines to de-index certain online search results.[16]
1.49Government senators also note the government has agreed to develop a Children’s Online Privacy code that would apply to online services that are likely to be accessed by children, as well as a proposal to prohibit the targeting of children under eighteen by digital platforms unless it was in their benefit such as preventing children from seeing age-sensitive advertisements.[17]
1.50In developing the code, the Australian Government should address concerns around the collection, use and retention of children’s data and the rights of users and consumers to have greater control over their data.
Senator Jess Walsh Senator Jana Stewart
Deputy Chair Member
Senator for Victoria Senator for Victoria
Footnotes
[1] The Treasury, Digital Platforms— Consultation on Regulatory Reform, 20 December 2022, https://treasury.gov.au/consultation/c2022-341745 (accessed 24 November 2022).
[2]Australian Government, ‘Government Response: Privacy Act Review Report’, 28 September 2023.
[3]The Hon Michelle Rowland MP, Minister for Communications, ‘New ACMA powers to combat harmful online misinformation and disinformation’, Media Release, 20 January 2023.
[4]Office of the Australian Information Commissioner, ‘OAIC welcomes additional Budget funding’, Media Release, 9 May 2023.
[5]The Hon Julie Collins MP, Minister for Small Business, The Hon Andrew Leigh MP, Assistant Minister for Competition, Charities and Treasury, ‘Unfair contract terms banned from today’, 9November 2023.
[6]The Treasury, Unfair trading practices - Consultation Regulation Impact Statement, 31 August 2023, https://treasury.gov.au/consultation/c2023-430458 (accessed 24 November 2022).
[7]Department of Industry, Science and Resources, ‘Supporting responsible AI: discussion paper’, 1June 2023; The Hon Ed Husic MP, Minister for Industry and Science, ‘Australia signs the Bletchley Declaration at AI Safety Summit’, Media Release, 3 November 2023.
[8]The Treasury, A Strategic Plan for Australia’s Payments System, 7 June 2023.
[9]The Hon Michelle Rowland MP, Minister for Communications, ‘First steps underway toward a new local TV prominence framework’, Media Release, 10 August 2022.
[10]The Hon Michelle Rowland MP, Minister for Communications, ‘Albanese Government takes major steps forward to improve online safety’, Media Release, 22 November 2023.
[11]The Hon Tony Burke MP, Minister for Employment and Workplace Relations, ‘World-leading legislation to protect gig workers’, Media Release, 31 August 2023.
[12]The Hon Michelle Rowland MP, Minister for Communications, ‘Update on the National Roundtable on Online Dating Safety’, Media Release, 26 March 2022; Michelle Rowland, Minister for Communications, ‘Government demands dating sites do better by Australians’, Media Release, 18 September 2022.
[13]The Hon Michelle Rowland MP, Minister for Communications, ‘Changes to modernise Australia’s Classification Scheme on their way’, Media Release, 5 September 2023.
[14]The Hon Michelle Rowland MP, Minister for Communications, Online Safety (Basic Online Safety Expectations) Amendment Determination 2023, www.infrastructure.gov.au/have-your-say/online-safety-basic-online-safety-expectations-amendment-determination-2023 (accessed 22 November 2023).
[15]The Hon Mark Dreyfus KC, MP, Attorney-General, ‘Albanese government to strengthen privacy protections’, Media Release, 28 September 2023.
[16]Australian Government, ‘Government Response: Privacy Act Review Report’, 28 September 2023.
[17]Australian Government, ‘Government Response: Privacy Act Review Report’, 28 September 2023.
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