ACCC steps up digital regulation in 2020 - here’s what ADMA members need to know

Australia’s consumer and competition regulator - the ACCC - expanded its remit across digital and data practices during 2020, offering data-driven marketers insight into the evolving privacy, consent and data-handling landscape ahead in 2021.

The greatest understatement of 2020 is to say the Coronavirus pandemic changed us. Part of those changes have been to confirm technology’s all-pervasive role in our everyday lives, facilitating everything from work through to schooling, shopping and even telehealth appointments.

Whilst most Australians were upping their technology game, talking more Zoom calls, watching media conferences on social media and using QR codes to do COVID-safe check-ins, the ACCC was putting their newly established specialist branch experts to work regulating and investigating digital platforms.

This is one more sign the federal government will get tougher on regulating how consumers and businesses use technology, handle personal data, maintain privacy and deal with big tech companies like Google and Facebook.

It’s also something the data-driven marketing industry needs to stay across, to make sure regulations enable our sector to flourish while protecting consumers and ensuring we operate in competitive markets.

The ACCC’s Digital Platforms branch has a remit to investigate search engines, social media services and online private messaging. This is likely to affect the overall data and advertising market as well as the ways data-driven marketers collect, store and use data and communicate to consumers.

Governments around the world are actively regulating the digital economy and a common theme is looking at big technology and privacy, transparency of data practices and competition amongst other key issues.  ADMA is staying abreast of local and, where relevant, global developments related to data driven marketing  to ensure we make the right submissions to regulators on our members behalf, while keeping members informed of issues. We aim to  provide solutions for members that are relevant best practice in their marketing activities.

Some of the key actions the ACCC acted upon during 2020 included:

Calling out businesses making false claims about algorithms

Trivago breached Australian Consumer law by misleading the public in its ads, which promised users the cheapest rates for hotel rooms while actually giving priority to its highest paying partners.

“Trivago used an algorithm that placed significant weight on which online hotel booking site paid Trivago the highest cost-per-click fee in determining its website rankings,” according to the ACCC. The regulator has also been pushing Google and Facebook to be more transparent about their ranking algorithms as part of the News Media Bargaining Code negotiations.

Keeping business accountable in promotions and online shopping

Furniture retailers Koala and Plush Sofas were fined for promoting false “was/now” pricing. The ACCC is also pushing eCommerce retailers - including Nike - to clearly inform consumers when they are likely to be charged international transaction fees while shopping online.

The ACCC also promises to improve “product safety in eCommerce through enhanced compliance commitments from online platforms”. 2020 saw the ACCC prioritise three main product safety issues, including the Takata airbag recall, kids and babies’ product safety – particularly button batteries, cots and prams and toppling furniture – and eCommerce. 

This will likely mean that large and small eCommerce websites - and platforms like Facebook and Google - will need to play a role in making sure products being sold in this country meet Australia’s rigorous safety Standards.

ACCC’s 2020 annual report also digs into some big data, technology and privacy issues for data-driven marketers, including:

1. Digital Platforms Inquiry 2020-2025

What is it: This is the grand-daddy of all the digital market investigations that resulted in the creation of the new digital platform specialist branch and will continue to investigate and monitor digital platforms until 2025, releasing regular six-monthly reports into investigations. 
What were the key outcomes: The 2020 report made 23 key recommendations, which you can read in full here. The ACCC summarised its future remit to look at issues like:

• Detailed examination of mergers and acquisitions: the ACCC began investigations into Facebook’s purchase of Giphy and Google’s purchase of Fitbit looking at market power in the digital supply chain. The ACCC wants big platforms to give them notice about proposed acquisitions that may limit competition

• Data portability for digital platforms: this is now playing out through the Consumer Data Right legislation with plans to promote competition by enabling consumers to “take their own data” to other providers

• Proactive investigation and monitoring of digital platform markets: the new specialist branch will provide a report into different markets every six months until 2025, with the first one investigating messaging services like Whatsapp and Facetime

• Regulatory changes to media: now playing out in the News Media Bargaining Code and changes to copyright takedown notices, the ACCC has also started discussion around funding public broadcasting and using grants and philanthropy to support public journalism

• Educating and improving media literacy: using school programs and creating a Digital Platforms Code to counter disinformation and media fragmentation

• Reform and strengthen Australian privacy laws: Each of the Digital Platforms Inquiry, The Customer Loyalty Scheme and Advertising Services inquiry recommended there should be an Office of the Australian Information Commissioner privacy role for digital platforms, along with abolishing unfair contract terms and trading practices. The Attorney General’s Office released the Privacy Act Review Issues Paper at the end of October in 2020

• New ombudsman to resolve complaints with digital platforms: digital platforms like Facebook and Google will be asked to comply with dispute resolution requirements

2. Digital Advertising Services Inquiry 

What is it: A market investigation into digital advertising technology services and digital advertising agency services, including programmatic advertising providers. A full issues paper was published in March, and ADMA made a submission to the enquiry. This is part of the work of the Digital Platforms Inquiry.

What were the key outcomes: The ACCC admitted the pandemic disrupted industry submissions to this inquiry, though a final report is expected to be delivered to the Federal Government by December 31, 2020.
One of the key issues at play is the ‘disappearing delta’, with brands not knowing where their digital ad dollars actually go and publishers not receiving large enough amounts to remain sustainable.

3. News Media Bargaining Code

What is it: The federal government is forcing Google and Facebook to pay publishers for news. It’s also demanding the tech giants are transparent about how news stories are ranked to appear in search and social media results. This is part of the work of the Digital Platforms Inquiry.
What were the key outcomes: This code is still at the draft legislation stage, but has resulted in emphatic lobbying, with Facebook and Google effectively threatening to stop publishing news on their platforms. The code will have ramifications for large and small content publishers.
The ACCC ran its own Perceptions survey during 2020 and found Facebook was the second most common channel for news access behind free-to-air TV, overtaking hard-copy and online newspapers. What’s more, as a source of news for consumers, free-to-air TV is at 47 per cent, down from 61 per cent in 2018; hard-copy newspapers are at 16 per cent, down from 25 per cent in 2018; and online newspapers are also at 16 per cent, down from 25 per cent in 2018.

4. Online Messaging Services Inquiry

What is it: The ACCC interim report into messaging services - including text, voice or video messaging - says the big players of Facebook, Apple and Google have a significant market advantage but also “extensively track users’ activities online and on mobile apps through the use of cookies, software development kits and other technologies.” This is part of the work of the Digital Platforms Inquiry.
What were the key outcomes: The report makes the case Facebook is likely more powerful than Apple in the messaging services market. It also dives into detailed information that Google’s tracking codes are on 80% of Australia’s top 1000 websites while Facebook’s tracking is on around 40% of them. This report explained how once again the ACCC will be cooperating with other regulatory agencies around the world as “international collaboration and coordination is critical to address the position and conduct of major platforms, given the worldwide nature of many of these businesses”. The media release about the interim report flagged concerns about advertising contracts, the rise of voice-activated technology in tracking consumers and the power of Google Search to deliver users to an advertisement.

5. Consumer Data Right

What is it: This new data right enshrines consumers ability to take their personal data held by banks to other financial providers to gain more competitive advantages, such as better mortgages, credit card deals and so on. It has been a ‘test and learn’ situation to get the technology and security issues right, and the plan is to roll the CDR out to energy and then the telecommunications industry and eventually to other industries as suitable.
What were the key outcomes: This has been a complex thing to get right, as data comes in many shapes and sizes and working out the right technology - and safeguards - to have in place has meant involving the OAIC (who regulate data breaches) and the ACCC to work with the big four banks. Some mainstream media are now reporting that regulation of the Consumer Data Right may move from the ACCC to Treasury. Wherever the remit eventually sits, it will be important for data-driven marketers to watch how this develops.

6. Consumer Loyalty Schemes

What is it: Supermarket, hotel and travel loyalty schemes were a compliance focus in 2019, and while 2020 didn’t see significant developments in the investigations into these schemes, they did get a mention in the ACCC 2020 Annual Report.
What were the key outcomes: A report was released in December 2019  that recommended loyalty schemes:

• better inform consumers,

• improve their data practices,

• stop automatically linking members’ payment cards to their loyalty scheme profiles.The report specifically stated the ACCC’s view that Coles, Flybuys and Woolworths Group should end the practice of automatically linking customers’ payment cards to their loyalty scheme profile. The consumer watchdog said tracking customers’ purchases when they do not scan their loyalty card is not transparent.

The broader changes the ACCC recommended to consumer and privacy law in this review are now swept up in the Digital Platforms Inquiry and have merged into a bigger - more global - picture that regulators need to work carefully to resolve.

Truth, transparency and making sure all businesses - and consumers - get a fair deal has been a focus for Australia’s regulator, the ACCC, since it was created in 1995 to administer the Trade Practices Act.

The ACCC remit has grown as technology has raised complex issues of security, consent, privacy, market power and more.  While many may have argued that regulators typically only react to market conditions, 2020 has cemented the ACCC’s proactive role at taking on large digital platforms for regulation.

Each of these inquiries show how regulators have become an important  driving force in holding businesses accountable for their data driven marketing engagement with their customers. While the individual inquiry might not always appear to directly involve the marketing and advertising industry, the development and outcomes will. ADMA continues to be a point of reference for education that is reflective of regulatory developments.  ADMA’s courses are tailored to help members develop processes and practices that strengthen their resolve in building customer trust.

The world is watching where this goes and the data- driven marketing industry will bode well to do the same.