Saturday, September 23, 2023

The ACCC wants tighter controls on tech titans Meta, Google, Apple and Amazon to tackle scams and fraud

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The Australian and Consumer Competition Commission (ACCC) wants tougher regulations to tackle issues such as online scams, unreliable apps and fake reviews, giving major tech companies like Meta and Google the responsibility to address the harm done to consumers and small businesses .

The ACCC’s fifth report in its five years Application for digital platform services proposes subjecting technical platforms to mandatory dispute resolution processes and stricter requirements for fighting scams and other issues.

Scamwatch saw the value of social network and mobile app scams reported to them nearly double to $92 million by 2021. It is estimated that only 13% of victims report their scams to Scamwatch while a third of victims tell no one that they have been scammed.

The ACCC report proposes mandatory codes of conduct for platforms such as Google and Facebook’s parent company Meta, and services to protect and promote competition.

ACCC Chair Gina Cass-Gottlieb said the expansion of digital platform services has created problems that current consumer and competition laws cannot solve.

“Our analysis has identified the harm to consumers and competition across a range of digital platform services that are pervasive, entrenched and systemic,” she said.

“The critical positions digital platforms occupy, as ‘gatekeepers’ or ‘middlemen’ between businesses and consumers, mean they have a broad impact across the economy, making the reforms we recommend crucial and necessary for all Australians.”

Scams remain a major concern for regulators and other agencies, along with the growth of fraudulent apps in app stores, as well as fake reviews and review manipulation.

Cass-Gottlieb said digital platforms should do more to avoid scamming their users.

“Digital platforms that host or otherwise act as intermediaries between scammers and their victims are in a unique position to identify and stop scams and remove malicious apps,” she said.

“We also need more action against fake reviews from platforms whose services contain ratings and reviews, including those that appear on search, social media, app stores and online marketplaces.

“These problems have been exacerbated by a lack of dispute resolution options for consumers and small businesses, who often simply give up seeking redress because they can’t get the digital platforms to properly consider the issue.”

The ACCC report recommends new laws that require digital platforms to:

  1. Provide easy-to-use processes for reporting scams, malicious apps, and fake reviews, and responding to such reports
  2. reduce the risk of scams by authenticating certain business users, such as advertisers, app developers, and merchants
  3. publish review verification processes to provide key information to online review readers to help them assess the trustworthiness of reviews on the platform
  4. report on scams, malicious apps and fake reviews on their services, and the measures taken to deal with them
  5. ensure that consumers and small businesses have access to appropriate dispute resolution, supported by the introduction of a new digital platform ombudsmanship.

The ACCC chairman argues that major digital platforms have the ability and incentive to engage in behavior that harms competition, including preferring their own services, or imposing binding regulations such as smartphones preloaded with a certain bundle of apps.

Cass-Gottlieb said the ACCC wants to see a new regulatory regime alongside existing competition laws to address anticompetitive behavior, unfair treatment of business users and barriers to entry and expansion by potential rivals.

“We advocate for service-specific codes of conduct that apply to designated digital platforms,” she said.

“This would ensure that the obligations are properly targeted to specific competitive issues present in specified digital platform services, allow for stakeholder consultation, and provide the flexibility to address emerging and new forms of harmful behavior.”

The complete Digital Platform Services Research 2020-2025- September 2022 Interim Report is here.

New federal treasurer Jim Chalmers was presented with the report on September 30. Commenting on the ACCC’s release of the report last week, he said the government is considering the ACCC’s recommendations and will discuss the proposals publicly.

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