The Australian Competition & Consumer Commission (ACCC) has called for an overhaul of current consumer law, to better protect Australians from unfair trading practices when engaging with digital markets. As part of its five-year inquiry into digital platforms and services, the organisation has released a report outlining a range of issues currently impacting Australian consumers, that are not sufficiently addressed by existing laws.
The organisation found that, due to the digital nature of select market platforms – including online storefronts for video games, and other gaming storefronts – existing regulation does not provide solutions when needed. Moreover, the report identified an array of issues within digital markets that may overtly cause harm to consumers.
Tactics including manipulative design practices – ‘such as using interfaces that direct consumers to more expensive subscriptions or purchase options’ – continue to be an issue. An ACCC survey revealed 26% of consumers who had spent money on a video game in the last two years believed they’d made a one-off gaming purchase, but this turned out to be a longer-term subscription.
Another major issue facing consumers purchasing games digitally is the unclear bounds around ownership. Generally, consumers are aware that when they purchase digital games, they are purchasing a license for that content. Regardless, the ACCC has taken issue with this practice, and called on operators of digital game stores to ‘explore mechanisms that allow consumers to download and keep the games they purchase, so that they can continue playing them even if the store ceases trading.’
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It has also called on digital platform holders to ‘mitigate consumer harm from paid loot boxes’ by clearly and prominently labelling what consumers may get from loot boxes, and identifying the probabilities behind each opening.
A third issue identified by the organisation is a need to reduce the risks of ‘unwanted and accidental in-game spending’ to ensure that when consumers are purchasing items, their nature is better understood. That includes better labelling virtual currencies, and ensuring a clear linkage between in-game currencies like coins or gems, and real world money.
These challenges can’t be addressed meaningfully under current consumer law, per the ACCC. Rather, there must be regulatory reform to help consumers find solutions and reparation where needed, should they face exploitation by digital platform holders.
‘Digital platform services are critically important to Australian consumers and businesses and are major drivers of productivity growth in our economy,’ Gina Cass-Gottlieb, ACCC chair said in a press release.
‘While these services have brought many benefits, they have also created harms that our current competition and consumer laws cannot adequately address. This is why we continue to recommend that targeted regulation of digital platform services is needed to increase competition and innovation, and protect consumers in digital markets.’
As part of its push for reform, the ACCC has recommended an unfair trading practices prohibition, as well as the establishment of a new, external dispute resolution body specifically for digital platform services, and an entirely new digital competition regime. There is hope that with these solutions, consumers will be better protected when engaging with digital markets online.
You can read more about this push for regulatory change, and the newly-published Digital Platform Services Inquiry Report, on the ACCC website.
