Advocating for economy-wide unfair practice prohibition

The ACCC observed practices that can exacerbate these issues and result in consumer harms, but are unlikely to contravene the ACL. This is because the conduct is not sufficiently harmful to amount to unconscionable conduct under the ACL or does not constitute an unfair contract term, and rather than being actively misleading, may be a result of distortions that can be created through a digital platform.

Harms observed by the ACCC

• Providing users with a frictionless and easy means to sign up for a paid service, but introducing difficulties and high barriers to consumers who may wish to cancel them.
• Inducing consent or agreement by lengthy contracts, providing insufficient time to consider contracts or all-or-nothing ‘clickwrap’ consents. These practices are likely to prevent consumers from reading, or contribute to consumers’ tendency to not read, online terms of service or privacy policies.
• Engaging in harmful and excessive tracking, collection and use of data which may result in excessive and unwanted collection of user data. This can result in profiling of customers, reduced privacy and security, and manipulation through unsolicited targeted advertising.
• Using dark patterns to create a lack of transparency about pricing and quality of alternative products, or other interface design strategies (such as prominence and framing) to actively undermine the ability of consumers and business users to compare alternatives and make informed choices (eg- through the use of popups promoting products affiliated with particular digital platforms).

Smaller businesses also need to accept standardised terms of service which may contain unfair or restrictive clauses, to access consumers through the platform. For example, app developers have a limited level of discretion to amend the terms and conditions that control the distribution of apps through app stores like the Apple App Store or Google Play Store. 

ACCC's recommendations

• The ACCC continues to support the adoption of new and broader economy-wide prohibitions on unfair trading practices to address certain business practices that occur online and offline. These should accompany the more targeted reforms on digital platforms.
• The ACCC supports the unfair contract term prohibition and application of penalties for breaches that will come into effect on 10 November 2023.
• The ACCC also supports creating voluntary standards to be developed (either at an industry-wide level or about specific issues) to address harmful behaviour that may not breach existing Australian consumer protection laws.

Potential implications

• The ACCC has had success in advocating for the strengthening of provisions of the CCA relating to unfair contract terms and increasing penalties. It is likely the ACCC will continue its support for introducing legislation that prohibits unfair trading conduct in light of this momentum for reform to other parts of the CCA.
• Federal, state and territory consumer Ministers have previously agreed to progress consideration of this issue through the development of a regulatory impact statement. This process will consider the nature and extent of unfair trading practices that are not currently captured by existing provisions of the ACL. It also considers options to address the problems, including a potential unfair trading practices prohibition. The ACCC is participating in this work. The Government will release a regulatory impact statement for public consultation in due course.
• The introduction of a general prohibition on unfair trading practices may result in many firms (ie not just digital platforms) having to overhaul their processes to ensure compliance with the new measures.