The Australian Competition and Consumer Commission (ACCC) has released its final report from the five-year Digital Platform Services Inquiry, warning that while digital platforms are central to everyday life and business productivity in Australia, they also present significant risks to competition and consumer protection.

The report highlights that 99 per cent of Australian adults now use internet-connected devices, 94 per cent own a smartphone, and 37 per cent have wearable technology. 

Large platforms such as Google, Apple, Meta, Microsoft, and Amazon collectively hold more than USD 13 trillion in market capitalisation and continue expanding into areas including cloud computing, generative artificial intelligence (AI), and online gaming.

However, the ACCC warns that “a range of unfair trading practices, including choice architecture that exploits consumers’ behavioural biases,” along with harmful apps, fake reviews, and opaque pricing, continue to erode trust. 

Survey data shows 72 per cent of Australians using online marketplaces encountered potentially unfair practices in the past year, such as hidden charges or accidental subscriptions.

Competition concerns remain acute where a small number of dominant platforms control key markets. The ACCC says such firms can “engage in strategic conduct to entrench and extend their market power,” including self-preferencing, tying, exclusivity agreements, and limiting interoperability. 

This market structure, the report notes, risks higher costs for users, reduced innovation, and less choice.

The regulator is urging swift legislative action on a proposed digital competition regime, a general ban on unfair trading practices, and the creation of an independent external dispute resolution body for digital platform services. 

Survey data found 82 per cent of Australians support such a body, with 91 per cent considering it important for online marketplaces.

Emerging sectors such as cloud computing and generative AI are identified as needing close monitoring. The ACCC notes potential anti-competitive risks in cloud services, including high barriers to entry, bundling practices, and costly data transfer fees. 

In AI, it flags possible misuse by scammers, privacy risks, and the creation of harmful content, with 96 per cent of Australians expressing at least one concern and 83 per cent saying companies should seek consent before using their data to train AI models.

The final report makes six recommendations, including:

• Introducing economy-wide prohibitions on unfair trading practices and strengthening unfair contract laws.
  
• Imposing targeted consumer protection measures such as mandatory scam prevention processes, stronger review verification, and access to an independent ombudsman.
  
• Creating service-specific codes for designated platforms to address anti-competitive conduct like self-preferencing and tying.
  
• Maintaining ACCC monitoring of emerging technologies like AI and cloud computing.
  
• Establishing the Digital Platform Regulators Forum (DP-REG) as a permanent, well-resourced body for coordinated oversight.