ACCC to examine expanding digital platform ecosystems

The Australian Competition and Consumer Commission (ACCC) will examine the expanding ecosystems and competitiveness of digital platform service providers as part of its five-year Digital Platform Services Inquiry.

The Digital Platform Services Inquiry 2020-25 was launched in February 2020, casting its eye on the largest digital platform service providers currently operating in Australia, including Alphabet (Google), Amazon, Apple, Meta (Facebook) and Microsoft, which together create a “web of interconnected products and services”.

In March, the Commission made a decision to publish an issues paper seeking views on the expanding ecosystems of platform providers, which will be the focus of the Digital Platform Services Inquiry’s seventh interim report.  Submissions on the matter are due by 5 April.

The paper will seek answers from consumers, businesses and stakeholders on investment decisions made by digital platforms, the interconnectedness of expanded products and services within each ecosystem, and the potential impacts on competition and consumers.

It will also examine products and services offered by digital platform service providers across a variety of sectors and will use examples, like the expansion into consumer cloud storage and smart home devices, to analyse the relationships between digital platform services and various services offered in their digital platform ecosystems.

The paper will look at expansion strategies used by digital platform service providers and how this has affected the interoperability of products and services across ecosystems, and if they have increased consumer lock-in behaviours or other engaged in conduct like bundling, tying or self-preferencing to inhibit competition.

The Commission said it will take into consideration excessive collection and potentially problematic use of personal data or other behaviours such as dark patterns which confuse or manipulate consumers.

“This report will assess how that data can be leveraged across products and services within an ecosystem that may prevent businesses from entering and competing,” ACCC Chair Gina Cass-Gottlieb said.

“Large digital platforms have become an integral part of our daily lives, they have access to enormous user databases and personal information across their ecosystems.

“We’re eager to hear from consumers and business about their experiences with digital platform services within these ecosystems, and how they also use other related consumer cloud storage services and smart home devices within a digital platform ecosystem.”

The ACCC’s Digital Platforms Branch is conducting its five-year inquiry into markets for the supply of digital platform services in Australia and their impacts on competition and consumers, following a direction from the Treasurer in 2020. The inquiry reports to the Treasurer every six months and examines different forms of digital platform services, their advertising services as well as data brokers.

This issues paper will inform the ACCC’s seventh report due to be submitted to the Treasurer by 30 September 2023.

The scope of the Digital Platform Services Inquiry 2020-2025 covers the following matters:

  • the intensity of competition in markets for the supply of digital platform services, with particular regard to the concentration of power, the behaviour of suppliers, mergers and acquisitions, barriers to entry or expansion and changes in the range of services offered by suppliers of digital platform services
  • practices of suppliers in digital platform services markets which may result in consumer harm
  • market trends that may affect the nature and characteristics of digital platform services
  • developments in markets for the supply of digital platform services outside Australia.