Digital platform services survey: how far we’ve come and what to expect in 2022

The ACCC Digital Platform Services Survey is in full swing and is expected to report in September 2022 on regulatory reforms to address the issues identified in three interim reports to date.

On February 10, 2020, the Australian government ordered the Australian Competition and Consumer Commission (ACCC) to conduct a quinquennial survey of the markets for the provision of digital platform services and their impacts on competition and consumers (the Digital Platform Services Survey Where DPSI). The DPSI follows the 2019 ACCC digital platform survey (PPP).

The ACCC has published three interim reports under the DPSI:

  1. Online private messaging (September 2020)
  2. Application markets (March 2021)
  3. Default search settings and choice screens (September 2021)

Below we summarize the key takeaways from each of the three reports released to date (along with two more reports slated for release in 2022).

Online private messaging services (October 2020)

the first interim report of the DPSI focused on Australia online private messaging services offered by a wide variety of platforms. Online private messaging services encompass a range of services, including text, audio and video messaging services.

In its report, ACCC identified potential consumer concerns regarding:

  • the display of sponsored search results on mobile devices, and the extent to which sponsored content may reduce the ability of consumers to obtain information through search that best meets their needs;
  • monitoring user online activity, including the ability of new products and services (such as voice assistants and augmented and virtual reality services) to increase the ability of providers to collect consumer data;
  • allegedly limited consumer understanding of the data practices to which they consent;
  • scams on digital platforms, which ACCC has seen an increase (with an 89% increase in scam activity in 2021 compared to 2020).

The private messaging services report elaborated on the ACCC’s previous concerns expressed in the DPI that the standard contractual terms between Australian companies and advertising platforms could be considered “unfair” within the meaning of the Australian Consumer Law (LCA). The ACCC specifically noted its view that many model contracts for private messaging services often confer broad discretionary powers on platforms and limit the ability of companies to resolve issues as they arise. due to dispute settlement clauses benefiting the platform and not the users (including as a choice of forum, exclusive jurisdiction clauses and confidentiality restrictions).

Application markets (March 2021)

the second interim report considered the distribution of mobile applications to users of smartphones and other mobile devices. Application markets are a critical gateway to reaching consumers given the ubiquity of smartphones around the world and in Australia. Examples of app markets include Google Play and the Apple App Store.

In its report, ACCC made no recommendations and instead proposed a number of “potential actions”, including:

  • require application marketplaces to provide users with information about alternative payment options and remove restrictions on developers from offering such alternatives;
  • increase transparency on how and when key algorithms work and what this means for what users see;
  • combat the risk of self-preference in the discovery of the application market. The ACCC is concerned that app store operators have the ability and incentive to favor their own proprietary apps at the expense of competing third-party apps, and that such behavior could have anti-competitive effects in downstream markets (e.g. (example, purportedly pre-installing or setting proprietary apps as default; better visibility for proprietary apps in markets; or greater device functionality for proprietary apps compared to third-party apps);
  • provide consumers with the ability to rate and rate proprietary (i.e. preinstalled) applications;
  • provide consumers with more choice over default apps and app settings;
  • require application markets to take additional measures to address the risks of malicious, exploitative or otherwise harmful applications; and
  • address the perceived risks that application markets misuse the commercially sensitive information of their downstream competitors.

Web browsers and search services (October 2021)

In his third interim report, the ACCC examined how web browsers and general search services are offered to consumers, and whether consumers have real choice in what is available to them.

The ACCC has determined that many browsers are offered by default to consumers and that most consumers continue to use the default web browser and search service initially offered to them instead of switching to another provider. The ACCC is particularly concerned about the following:

  • consumers are likely to stick with what is on offer and may not always know how to change their browser or search engine, or be aware of alternative services; and
  • the architecture of device ecosystems can exacerbate default biases and hamper consumer choice.

In its report, the ACCC recommends the establishment of a mandatory choice screen, which the ACCC would have the authority to develop and implement. “Choice screens” have been considered in other jurisdictions, notably in the EU, where Google voluntarily implemented a choice screen for Android in 2019. Choice screens aim to make it easier for consumers to choose the search engine to use on their devices. The screen of choice would provide users with a selection of search engine options, thereby increasing consumer awareness of competing services. The ACCC said the design and scope of any mandatory choice display would be subject to industry consultation and be proportionate to the competition and consumer choice concerns identified in the report (which downplay the effects negative on efficiency).

The ACCC has also proposed to give it additional powers to improve competition and consumer choice in the provision of search engine services, which could include limiting the capacity of a “reputable search engine provider”. “(Whose criteria have not been explained) to:

  • link or combine their offer of search engine services with their offer of other goods or services; and
  • pay for certain default positions, subject to further consideration of the likely impacts of this measure on the business models of OEMs and browser vendors.

The ACCC suggested that these measures could also involve mandating such a supplier to:

  • provide access to its click-and-query data, and potentially other datasets, subject to extensive privacy impact review, careful design, and ongoing monitoring for ensure that there are no negative impacts on consumers; and
  • when you provide syndicated search results to downstream search engines, do so on fair, reasonable and non-discriminatory terms.

Upcoming Reports: Retail Markets and Regulatory Reform

The ACCC is set to release two more DPSI interim reports in 2022. The first will examine online retail markets, including:

  • current trends in online shopping and online retail markets;
  • the relationships between marketplaces and third-party sellers and marketplaces and consumers; and
  • the management of market places acting as platforms / facilitators.

The second report in 2022 will examine whether there is a need for regulatory reform to address the competition and consumer concerns that the ACCC has expressed to date in digital platform services markets, in particular:

  • competition and consumption issues identified during the DPSI to date;
  • competition and consumer issues identified in the survey on digital advertising services and IPR (as these issues fall within the scope of DPSI); and
  • whether there is a need for sector specific regulation to address these issues and complement Australian competition and consumer law, and if so, what these changes might include.


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