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In July 2019, the Australian Competition and Consumer Commission (ACCC) published its public inquiry into the impact that digital platforms have on the media industry. This culminated in a 623-page Digital Platforms Inquiry Report, which contains some interesting observations and recommendations relating to:

  • online search engines;
  • social media channels; and
  • digital content aggregators.

Following several months of consultation and planning, the Australian Government released its Response and Implementation Roadmap for the Digital Platforms Inquiry, dealing with the key issues outlined in the report. This article summarises the contents of the report and discusses the potential changes to consumer protection and privacy laws, if the recommendations are implemented.

Contents of the Report 

During its inquiry, the ACCC took submissions from a range of sources, including: 

  • consumers;
  • news outlets;
  • digital platforms; and
  • media organisations.

The aim of the Report is to provide the government with a framework it can use to implement change. It discusses how:

  • digital platforms impact the businesses using them, such as news media companies;
  • the interplay between platforms and media businesses will affect the quality and range of news provided; and
  • platforms currently use algorithms to present tailored news stories to individuals. 

Recommended Changes 

The Digital Platforms Inquiry Report makes recommendations for change in the realms of:

  • competition;
  • consumer;
  • media; and 
  • privacy law. 

These recommendations focus on protecting individuals, as large digital platforms become more dominant and threaten individuals’ consumer and privacy rights. 

The primary focus is to promote competition amongst all digital platforms. One way to do this is to regulate mergers and acquisitions (M&A) between media businesses more closely. These decisions should be made with the sole focus of maintaining an adequate level of competition in the industry. If the parties to an M&A deal consider that the merger could reduce competition, they should alert the ACCC.The digital platform market is currently dominated by just a few big players, such as:

  • Google;
  • Facebook; and
  • Twitter.

This could lead to issues where these media giants abuse their relative bargaining power to dominate small businesses and individuals. Therefore, the report recommends that the Australian Government changes the way they deal with unfair contract terms. An unfair contract term refers to any clause that: 

  • causes a significant imbalance in the rights and obligations of the parties to an agreement; or
  • is not reasonably necessary for protecting the legitimate interests of the business.

While a court could previously make an unfair contract term void, the ACCC suggests that these parties be subject to fines. The report also recommends that a new branch should be created within the ACCC, specifically to monitor digital platforms.

Recommended Changes in the Privacy and Data Space

The report also evaluates how individuals interact with digital platforms and the effect that this could have on privacy and data rights. As a result, the ACCC recommended a number of changes to privacy law to offset these potential consequences. Importantly, the volume and scope of data collected in the digital world is increasing. The ACCC’s findings reveal that most individuals are not aware of how their personal information is collected and used on digital platforms. People generally trade their data for the convenience of using the platform, without fully understanding the obligations that this comes with. Ordinary people generally do not have the time to read long and convoluted privacy policies, nor the legal capacity to understand the complex terminology used. Additionally, consumers do not have any control over how their data is used.

The report suggests several changes that give consumers better control over their personal information, including:

  • enforcing the Privacy Act upon entities which are currently exempt, such as small businesses;
  • changing the definition of “personal information” to include technical data, like IP addresses;
  • changing the definition of “consent” to mean that a more active, intentional step is required by individuals when they are asked for permission to collect their personal information;
  • requiring consent wherever platforms collect, use or disclose personal information, unless the information is necessary to perform a contract with the consumer, is required by law or is collected for reasons in the public interest;
  • introducing a “right to be forgotten” or an “erasure right” where the information is no longer needed; and
  • introducing civil punishments for “serious invasions of privacy” under the Privacy Act, allowing individuals to seek compensation where their privacy has been breached. 

Some of these changes are reminiscent of the European Union General Data Protection Regulation (GDPR), indicating a shift in Australian Privacy Law toward GDPR standards.

Potential Effects on Businesses 

The ACCC recommended that all business steps need to be taken to align the law with recent advancements in technology, to:

  • protect consumers;
  • improve transparency; and
  • remove power imbalances between businesses.

As a business owner, you should anticipate the tightening of consumer protection rights and privacy laws. You can prepare for these changes by: 

  • reviewing your privacy practices; and 
  • updating your privacy policy. 

It is also a good idea to review your contracts to ensure that they do not contain any unfair contract terms. If you are a small business owner who is currently exempt from complying with the Privacy Act, make sure that you are ready to comply in the near future if required. 

Key Takeaways 

The ACCC’s Digital Platforms Inquiry Report closely analyses the impact of search engines and social media networks upon business operations, with specific reference to competition and privacy. This could have a significant impact upon M&As in the digital industry, as well as more closely regulating and enforcing penalties for unfair contract terms. Additionally, privacy law could become more stringent by applying to a broader range of businesses and ensuring consumers have greater control over their data. You need to be aware of these changes and how they could affect your business. If you would like legal advice concerning the impact of the Digital Platforms Inquiry Report upon your obligations, contact LegalVision’s privacy lawyers on 1300 544 755 or fill out the form on this page.

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