On 25 July 2024, the ACCC published the issues paper for the tenth and final report of the ACCC’s Digital Platform Services Inquiry (DPSI).

What you need to know

The final report will focus on three topics:

1. Recent international developments in markets for digital platform services and their impact on competition and consumers

The ACCC notes some key themes have emerged globally from efforts to regulate digital markets, including:

• competition: anti-competitive self-preferencing, tying and bundling practices, addressing barriers to switching, and promoting access to third-party applications on a platform or service; and
• consumer protection: the use of consumer data (including practices such as combining personal data), promoting data portability, addressing business practices such as unfair trading and providing reporting and compliance mechanisms.

2. Major developments and key trends in certain markets for digital platform services

In the final report, the ACCC intends to provide updated information from certain earlier reports of the Inquiry, such as the March 2021 Report on App Marketplace. In the next report, the ACCC intends to focus on:

• examining changes to the offerings of key suppliers of these services, including as a result of recent technological developments;
• identifying changes in the scale and identity of the key suppliers of these services, including new entrants; and
• identifying changes in the way that consumers are using services, including views regarding trust and quality.

3. Potential and emerging competition and consumer issues which relate to digital platform services

In the final report, the ACCC intends to identify potential or emerging issues on a preliminary basis only. Such issues include potential competition and consumer issues in:

• online gaming;
• cloud computing (excluding consumer cloud computing); and
• generative artificial intelligence (AI), which we canvass further below. 

In response to these issues, the ACCC may identify areas that warrant further consideration or monitoring by government. The ACCC does not propose to comprehensively define the services or markets discussed, identify key suppliers, or calculate market shares of suppliers in Australia.

Generative artificial intelligence (AI)

Generative AI has been a hot topic around the world. Just earlier this week, on 23 July 2024, the European Commission, UK Competition and Markets Authority, US Department of Justice and US Federal Trade Commission published a joint statement on competition in generative AI foundation models and AI products (joint statement). The regulators recognise the transformational potential of AI, including that they could materially benefit citizens, boost innovation and drive economic growth while introducing new means of competing but also identified potential competition issues: 

1. concentrated control of key inputs;
2. entrenching or extending market power in AI-related markets. Interestingly, this concept of entrenching or extending market power is mirrored in the merger reform draft legislation released by the Australian Government yesterday, as we reported here; and
3. arrangements involving key players could amplify risks.

The ACCC appears to be similarly interested in this emerging issue. ACCC Chair Gina Cass-Gottlieb said“We are following recent developments in generative AI closely. Adoption has been extensive, and this technology continues to expand and develop at a rapid pace. Generative AI products and services may present new opportunities, but also new challenges with major implications for our work”.

What’s next?

Submissions close on 23 August 2024 and the ACCC is due to provide the final report to the Australian Government by 31 March 2025.

The current ninth interim report of the DPSI is also due to be sent by the ACCC to the government in September 2024. That report will focus on competition and consumer issues in relation to general search services in Australia, including the potential impact of generative AI as it relates to general search services.