Competition watchdog to target online retailers and ‘dark models’

The Australian consumer regulator will target online marketplaces and sellers who attempt to manipulate customers using ‘dark patterns’ over the next 12 months under new chairwoman Gina Cass-Gottlieb, who has called for tougher penalties and safety mechanisms more proactive.

Ms Cass-Gottlieb, who replaced former chairman and digital platform critic Rod Sims in March, named online marketplaces among the regulator’s top three product priorities for the coming year in a speech delivered on Thursday.

She added that the regulator would also not shy away from tackling emerging challenges such as online advertising, after securing a $44.7 million fine against Trivago in April for misleading consumers with algorithms. complex.

ACCC President Gina Cass-Gottlieb

Speaking at the Australian Competition and Consumer Commission’s National Consumers’ Congress in Sydney on Thursday, Ms Cass-Gottlieb announced the product safety watchdog’s priorities for the year ahead and called a less responsive protection model and tougher penalties for breaches.

In addition to child product safety and battery-related risks, online marketplaces are a top priority for the regulator, she said.

“The transition to online shopping that was underway before the pandemic has only accelerated,” Ms Cass-Gottlieb said.

“We will conduct online monitoring of online marketplaces and continue our engagement with them, extend the benefits of the Product Safety Pledge to which a growing number of online platforms have committed, and contribute to greater consistency of international practices. »

The Australian Product Safety Commitment is a voluntary initiative that commits online businesses to certain product safety responsibilities and reports. Online giants Amazon Australia, eBay Australia and Catch.com.au have been signatories since its launch in 2020 in response to the rapid growth of e-commerce.

Australia relies on voluntary commitment in the absence of a general safety provision prohibiting the sale of dangerous goods, which is common in other developed countries. This means that the ACCC identifies safety issues once they are already in the market or, in some cases, when a consumer has already been harmed.

Cass-Gottlieb and the ACCC want Australia to take a more proactive approach instead.

“Introducing a general safety provision that incentivizes manufacturers to ensure the safety of their products would allow us to move away from this reactive model and take more effective enforcement action for unsafe products,” he said. she declared.

The watchdog will also continue to probe online advertisements, deceptive practices and so-called “dark models” that attempt to exploit or pressure consumers into buying.

The Consumer Policy Research Center published research on dark patterns in Australia last week, finding that they are widespread and often prompt consumers to spend more and provide more personal information online.

Ms Cass-Gottlieb said manipulative and misleading advertising and marketing practices in the digital economy will be an “area of ​​focus” for the ACCC.

“While these advertising and marketing techniques are not new, we are seeing technology make them more sophisticated, widespread, and capable of distorting or ignoring consumer choice,” she said.

“The ACCC’s recent case against Trivago, which focused on the use of algorithms to deceive consumers, is a prime example of the ACCC’s ability to tackle complex emerging practices.”

The regulator sued Trivago, successfully arguing that the hotel price aggregation site misled customers through its advertising and ranking algorithm, which favored paying the company a cost-per-cost fee. higher clicks.

Encouraged by the decision and the similar heavy penalties imposed on Volkswagen ($125 million), Telstra ($50 million) and the Australian Institute of Professional Education Pty Ltd ($153 million), the ACCC Chairman said the regulator “will continue to seek significant and growing means.” enforcement sanctions against businesses for breaching Australian consumer law”.

The ACCC’s product safety priorities go hand-in-hand with its compliance and enforcement priorities, which were released in March.

Do you know more? Contact James Riley by email.

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