New digital platform rules crucial next step in consumer law reform

ACCC

The development of new upfront rules that force dominant digital platforms to treat their users fairly is the important next step in reforming Australia’s consumer protection laws, ACCC Chair Rod Sims said today.

Delivering the 2022 Ruby Hutchison Memorial Lecture, Mr Sims applauded the progress on stronger consumer laws in Australia, starting with the introduction of the Australian Consumer Law in 2011, which included penalties for breaches, and then a significant hike in penalties in 2018.

“When I arrived at the ACCC in 2011 a $1 million penalty against a large company was celebrated,” Mr Sims said.

“I remember the positive reaction to Optus having to pay a penalty of $3.6 million for a breach of the ACL in 2013. Then in 2018, it seemed a milestone that Ford, Apple and Telstra faced penalties in the $9 million to $10 million range. In 2021 we saw Telstra pay a $50 million penalty, Volkswagen pay $125 million and AIPE, a vocational training company, hit with a $153 million penalty.”

“High penalties are essential for effective deterrence. The ACCC does not have the resources to tackle most consumer law breaches, so our approach is to take specific cases, and allow high penalties to send a message to all other companies,” Mr Sims said.

Mr Sims said his proudest achievement was the alignment of consumer and competition law penalties in 2018. But glaring deficiencies in consumer laws remained, including the lack of a law against unfair practices and the lack of a general safety provision.

“Can you imagine a situation where someone was caught stealing and the result of the police inquiries was that they simply had to give the money back? No penalty for the actual stealing to deter others. But we have this in our product safety laws,” Mr Sims said.

“There is no law against selling unsafe good; you are not breaching any act by doing so. You simply have to recall the goods when they are seen to be unsafe.”

The next phase of consumer law reforms to be debated should relate to digital platforms with market power, Mr Sims said.

“Digital platforms have business models that seek to exploit all the data they have on you. We need laws to prevent the misuse of this data, either by preventing so called ‘dark patterns’ that get you to act against your best interests, or requiring steps to prevent scams, or allowing appropriate dispute resolution,” Mr Sims said.

Today’s 2022 Ruby Hutchinson Memorial Lecture was Mr Sims’ final speech as ACCC Chair.

Mr Sims said it remained important for regulators to be vocal advocates for the rights of consumers and to identify opportunities for law reforms when needed.

“There are some who believe that regulators should only enforce the law as it is and not suggest publicly and need for law change. What a loss to the public debate this suggests,” Mr Sims said.

The Ruby Hutchison Memorial Lecture is an annual speech in honour of the founder of the Australian Consumers Association, now known as CHOICE. The lecture is jointly hosted by CHOICE and the ACCC on World Consumer Day.

The full speech is available at: Continuing the ACL journey

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