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Australian Government’s response to Digital Platforms Inquiry to lead to significant regulatory change, but lacks holistic approach

17 December 2019 | Australia, Asia Pacific
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The Australian Government’s proposed changes to the digital platforms landscape are a clear step towards implementing regulatory change, but may signal a move away from an holistic overhaul of technology regulation, according to law firm Herbert Smith Freehills.  

The Government’s response to the Australian Competition and Consumer Commission’s (ACCC) Digital Platform Inquiry was released last week. However the response, while echoing many of the broad themes of the ACCC’s report, breaks these themes back down into individual topics and offers individual recommendations and specific reforms, thus potentially falling short of the ACCC’s initial vision.

Herbert Smith Freehills competition expert Lisa Emanuel said the Government’s response will no doubt drive change, though arguably moves us away from the comprehensive and holistic view of technology regulation the ACCC advocated for.

“At the time the Digital Platforms Inquiry was announced, it was ground-breaking in its attempt to take a comprehensive and cross-functional view of the complex regulatory landscape applying to digital platforms,” Ms Emanuel said. “The final report, at over 600 pages, considered the intersection of competition, consumer and privacy issues from a broader perspective of consumer welfare and trust.

“The ACCC advocated for an holistic approach to addressing competition law, consumer law, data protection and privacy and media regulation where digital platforms are concerned. Given the nature of policy and legislative reform, there is some cause to address each of these in a piecemeal way. But the government’s proposed reforms are to be made over a long timeframe, a move that may, in practice, result in a breakdown of the over-arching approach the ACCC is advocating.”

Herbert Smith Freehills’ technology, media and telecommunications specialist Anna Jaffe said the Government’s incremental approach could still lead to significant changes in the regulatory environment not only for digital platforms but for many other data- and media-driven businesses.

“The tech regulatory landscape is changing rapidly. It is complex and fragmented, both globally and by subject matter, making it difficult for technology providers to navigate,” Ms Jaffe said.

“The Government’s proposed changes are significant. However, there is a risk that this piece-by-piece approach could lose sight of the broader, more fundamental challenges that the Inquiry highlighted as being posed by new and emerging technologies and technology providers to existing regulatory environments worldwide.”

Ms Jaffe emphasised that technology companies are welcome of regulatory change that provides them with guidance, provided any reforms promote innovation and business growth.

“Trust in the technology industry has been damaged over recent years, particularly in respect of the privacy and security of data. This has then led to a fundamental rethink of the formerly ‘light-touch’ approach to its regulation,” she said.

“Regulation can take a critical role in building trust. If implemented in a way that drives toward a coherent and holistic global standard, regulation can help industry participants to establish or maintain a social licence to operate, and accordingly create an environment for their activities to flourish.”

Ms Emanuel said whatever approach the Government decided to take over the coming years would lead to substantial change for Australian businesses.

“Whatever the outcome, there is no doubt that businesses in every sector will need to monitor and approach compliance comprehensively, holistically, and with an eye towards driving standardisation over time in order to remain ready to respond to the digital age.”

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