Digital Platform Services Inquiry Third Interim Report

A number of key recommendations

The ACCC recently published its third Digital Platform Services Inquiry Interim Report (Choice Screen Report) as part of its ongoing role monitoring the impact of digital platforms on competition and consumers.

The Choice Screen Report focuses on the impact of pre-installation and default arrangements on competition and consumer choice in the supply of web browsers and general search services. It also assesses the effectiveness of choice screens in addressing the identified competition and consumer harms.

The Interim Report makes a number of key recommendations, building on previous ones from its Digital Platforms Inquiry Final Report ( DPI Final Report), earlier Digital Platform Services Inquiry (DPSI) Interim Reports, and the Digital Advertising Services Inquiry Final Report (Ad Tech Report).

Key takeaways - Heading level 3

• The Choice Screen Report focuses on the conduct of the largest vertically integrated search engine: Google. The ACCC considers Google has leveraged its dominant position in operating systems, app distribution and web browsers to foreclose access for rival search engines to important search access points.
  • The regulator considers access to consumers is particularly important in search markets, as they are subject to customer inertia driven by default bias, economies of scale and network effects.
  • In the ACCC's view, information asymmetries are leading consumers to remain with their pre-installed browser or default search engine, as they either lack the technical know-how to switch, or are not aware of alternative suppliers to switch to.
• The regulator recommends it be given the power to develop a mandatory choice screen in Australia, together with other sector-specific rules to address consumer choice and competition harms in search services.
• The ACCC also intends to consult on a regulatory regime that would apply to digital platform markets more broadly. This consultation will commence in early 2022, as part of its DPSI.

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