Introduction
I would like to acknowledge the Gadigal people of the Eora Nation as the traditional custodians of the land on which we gather today.
I pay my respects to their Elders past and present, and I acknowledge any First Nations Australians in attendance.
Thank you to Ed, the McKell Institute and our hosts at the University of Sydney here tonight.
On this day in 1972, Australians made a decision that would change the course of our nation.
A decision that still reverberates today.
Gough Whitlam - whose politics was shaped by these very halls around us - led the Labor Party to government for the first time in 23 years.
Under Whitlam, Australia saw what we could be.
The unimagined became the possible.
And the possible became the reality.
Sir Isaac Newton famously said that 'If I have seen further, it is by standing on the shoulders of giants.'
In so much of Australian politics, we are all standing on the shoulders of Gough Whitlam.
Even his political opponents admired him.
Malcolm Fraser said that Australia 'grew up' under Gough.
His reforms to healthcare, education, social justice, Indigenous affairs, international relations are well known.
His contribution to economic reform attracts less attention.
The early steps in opening up the post‑war Australian economy began with his 25 per cent reduction in tariffs and the creation of the Foreign Investment Review Board.
So too were the reforms to competition and consumer law.
The evolution of consumer rights
These reforms were not developed in a vacuum.
For the 50 years or so before the Whitlam government, Australian reformers had been chipping away at the status quo.
Various women's and housewives' associations began what can be called the Australian 'consumer movement' in the early 1900s.
Prior to this, consumer law was largely a reaction to challenges of scarcity and monopoly control of production.
This involved some direct controls on price and quality, licencing for production, and enforcing standardised weights and measures.
Foundational - but they barely shifted the dial in favour of consumers.
So consumer advocates - starting with those women's associations - began to lobby for reform.
The Australian Consumers' Association - CHOICE - was founded in the midst of the post‑Second World War consumerism.
As the volume and variety of goods expanded, the need for better regulation became apparent to give families a better chance in the face of big business.
A key step forward was reforms to codify basic principles of contractual fairness and what information the consumer had to enter a contract to buy.
Which brings us back to Gough Whitlam.
This year, we acknowledge 50 years since the Trade Practices Act - the precursor to today's Competition and Consumer Act - was introduced.
As a core principle, the Trade Practices Act codified the idea that the consumer had rights that must be protected and enforced.
A concept we might take for granted today, but was not always assured.
Prior to this, many practices were only illegal if declared so after time‑consuming investigation by the Trade Practices Commissioner.
But in his second reading speech introducing the new law, Attorney‑General, Lionel Murphy, another alumnus of the University of Sydney, noted that -
The existing law is still founded on the principle known as caveat emptor - meaning 'let the buyer beware'.
That principle may have been appropriate for transactions conducted in village markets.
It has ceased to be appropriate as a general rule.
Now the marketing of goods and services is conducted on an organised basis and by trained business executives.
The untrained consumer is no match for the businessman who attempts to persuade the consumer to buy goods or services on terms and conditions suitable to the vendor.
The consumer needs protection by the law and this Bill will provide such protection.
The Trade Practices Act put the consumer at the heart of the economy.
It established offences with penalties relating to misleading advertising, anti‑competitive mergers, coercive sales tactics, and other anti‑consumer actions.
It took aim at trade practices which, in the words of Murphy, 'served the interests of the parties engaged in them, irrespective of whether those interests coincide with the interests of Australians generally.'
Murphy's words still resonate in 2024 as he spoke of -
Practices which enable particular enterprises or groups of enterprises to attain positions of economic dominance which are then susceptible to abuse.
They interfere with the interplay of competitive forces which are the foundation of any market economy.
They allow discriminatory action against small businesses, exploitation of consumers and feather‑bedding of industries.
This Act transformed the Australian economy and its legacy carries on.
Through the period of the Hawke and Keating governments, great strides in competition policy reform were taken.
The 1992 report of the Hilmer Review underpinned competition policy and productivity growth for the next 2 decades.
The baton was carried on by the Rudd and Gillard governments which recognised that a national economy - where businesses operate across state borders - requires a national consumer law.
In 2008, the Productivity Commission handed down a report on Australia's consumer law framework.
It found duplication, inconsistency and complexity across the 8 separate state and territory Fair Trading Acts, the Commonwealth Trade Practices Act, and ASIC regulations.
This made it hard for consumers to know their rights and costly for businesses to comply.
The drag on the economy was estimated to be in the order of $4.5 billion a year.
The modernisation that followed - led by Craig Emerson and my colleague Chris Bowen - was the largest and most significant overhaul in consumer law in 25 years.
It created a single national consumer law for consumer protection and fair trading, unfair contract terms, and product safety.
How the consumer fits in the digital economy
Today, we face new challenges.
The digitisation of the economy has fundamentally changed our world.
It has changed the way we communicate, how we buy and sell goods and access services.
Information is transmitted around the world electronically in an instant, through the internet and digital platforms.
Goods are purchased online in a global marketplace.
Retail transactions and finance are now overwhelmingly digital.
All of this is facilitated by enormous amounts of personal data being stored and shared throughout the economy.
The pace of change is accelerating.
Globalisation and the digital revolution challenges the way nation‑states and multinational businesses meet their responsibilities.
But it does not displace them.
The Reform Storm - Consumer Protection for the digital economy
In our first 2 years, the government's focus has been to ensure that the rails of modern commerce are safe and secure.
The digital economy has enabled the industrialisation of the financial crimes of scams and fraud.
Fighting this has been a major focus.
It needed to be.
When we took office, criminals were stealing a massive $3 billion a year from Australians through scams -
A figure that had been doubling annually.
Investment scams, invoice interception, identity theft, romance scams and payment redirection.
Regrettably, the previous government saw this as a private problem, not a public challenge.
Australians were sitting ducks.
In 2 years, we've turned it around.
We established the National Anti‑Scam Centre, which brings together the expertise and capability of government agencies, law enforcement and the private sector to detect and prevent scams.
We have also invested in an SMS ID Registry, and established a blacklist of phone numbers being used by scammers.
We are blocking an average of 1 million scam calls and 1 million texts per day.
We've built new functions for ASIC and the NASC to take down scam websites.
ASIC alone has already taken down over 7,300 phishing and investment scam websites since July 2023.
And I have recently introduced legislation into parliament - the Scams Prevention Framework -
Which will establish new duties on designated businesses to prevent, detect, disrupt and report scams in their networks.
It sets a higher standard for industry to meet with clear financial penalties for failing.
Our plan is working.
Scam losses are now in decline.
The NASC reports scam losses fell by 41 per cent in 2023-24 - this is outperforming any other country.
The Scams Prevention Framework legislation will give us another strong asset in the fight against scammers.
These measures are part of a broader program of work.
The Privacy Act needed an uplift to ensure businesses are keeping consumer information safe.
And ongoing privacy reforms will better protect consumers and their data.
Identity theft and data breaches present real and enduring harm to Australians.
A significant source of data at risk is that required for identity verification.
Our Digital ID System establishes a secure and simple way for consumers to verify their identity.
It will also reduce the quantity of personal data that businesses and government need to hold.
Our National Cyber Security Strategy is helping to strengthen our whole‑of‑economy cyber resilience.
Last week, we passed new consumer protection laws for Buy Now, Pay Later products.
This is part of our plan of modernising the payments system regulation.
Cracking down on unfair trading practices
We are also updating our unfair trading laws because they do not adequately protect Australians in light of modern marketing and payment practices.
We will legislate a new, principles‑based ban on unfair trading practices under the Australian Consumer Law.
This will address practices that are ripping Australians off and are not caught by the existing consumer law.
Subscription traps - where it is hard for consumers to cancel a subscription they no longer need or want.
Drip pricing - where fees are hidden or added throughout the stages of a purchase.
Dynamic pricing - where the price of a ticket to a concert or a footy game changes during the purchasing process.
These practices have no place in fair markets.
Removing them will ease cost‑of‑living pressure and give consumers a better deal.
We've taken the same approach to cash as Australians feel strongly about their right to use it.
While cash now accounts for the minority of retail payments, we will ensure cash continues to be accepted.
We are also tackling surcharge practices so that Australians aren't charged fees for using their own money to buy goods with a debit card.
These reforms will help to arrest the sneaky behaviours that drive up costs for Australians already under pressure.
Ensuring better competition
My colleagues, Jim Chalmers and Andrew Leigh, have been working hard to modernise our competition laws.
Andrew has been focused on the impact of concentrated markets on productivity and innovation.
In response, he has driven an overhaul of our merger laws to ensure they serve the public interest.
Similarly, they have sought to address anti‑competitive behaviour in the supermarket sector.
This is about giving consumers and suppliers more rights and regulators more power.
But there is still a missing piece.
The dominance of digital platforms in the modern economy
In this context, we have asked whether our competition laws are fit for the digital economy.
Markets rely on effective price signals to help buyers and sellers make good decisions.
But when one party knows more than the other, poor outcomes can follow.
We know this in things like the sale of a used car.
The seller knows more than the buyer about the quality of the car.
This could lead to situations where buyers buy bad cars.
Or they choose not to buy a perfectly good car, leading to a bad outcome for both the buyer and seller.
Buyers and sellers can overcome these problems of information asymmetry through things like a warranty to guarantee the quality of the car.
But the digital economy challenges our current legal framework.
It is characterised by the presence of a few, giant corporations with overwhelming market share.
The difference in resources and information between these titans and consumers is a chasm that consumers cannot hope to overcome.
The ACCC has been looking into the issue of competition in digital platform services.
In the fifth report of its Digital Platforms Services Inquiry, it noted that Google consistently provided between 93 per cent to 95 per cent of general search services between 2012 and 2022.
Over the same period, 96 per cent to 99.9 per cent of mobile devices used either Google's Android or Apple's iOS.
In 2022, the Apple App Store accounted for approximately 60 per cent of combined app downloads and the Google Play Store accounted for approximately 40 per cent of app downloads.
Meta's Facebook and Instagram combined supplied 79 per cent of social media services in Australia between 2018 and 2022.
Competition is not as simple as counting the number of firms.
However, effective competition means firms have an incentive to obtain customers on the price and quality of their offerings -
So the economy works in the interests of consumers.
However, the dominant platforms can charge higher costs, reduce choice, and use sneaky tactics to lock consumers into using certain products.
Innovation outside of the established players becomes almost impossible.
It also makes it difficult for small businesses which are required to submit to the terms of the big players.
Where one platform offers a service, the ACCC identified the risk that it becomes the 'gatekeeper'.
For example, the app store connects buyers and developers.
With a dominant app store provider, developers are forced to make their apps available on that app store.
This reduces the bargaining power of both developers and consumers.
Consumers may not even be aware of how this is playing out in front of them.
Why is this a problem
Take search engines, which are the front door to modern markets.
One business has near monopoly control over that front door.
And that business can preference certain businesses over other businesses in search results, giving it extraordinary market power.
Digital platforms are an unavoidable partner for most businesses.
Without a presence on Facebook, Instagram, or Google, most businesses - particularly small businesses - are not in the game.
This market power - coupled with the essential nature of the service - means that digital platforms are the gatekeepers for these services.
Small businesses and consumers cannot hope to negotiate on equal terms.
A new approach to competition in the digital economy is needed
Today, we go further in the proud Labor tradition of standing up for consumers.
To do this, the Albanese government will deliver a new digital competition framework to address anti‑competitive conduct by big digital platforms.
Where in the past we have relied upon rules being enforced after the fact -
The dynamic and complex digital economy requires a new approach.
Waiting for investigations can take years to resolve and remedy.
By the time we've cracked down on one practice, the harm has been done.
For example, a small business trying to gain market share can't survive long enough while waiting for a matter to be dealt with.
And the big digital platform simply adapts and moves on.
They're not necessarily competing on having a better product - just on being bigger.
And this means consumers can miss out on higher quality and lower cost goods and services.
Under our new framework, we will introduce upfront rules and obligations on big digital platforms.
The minister will have the power to designate platforms, based on advice from ACCC, that pose the greatest risk of competition harms to Australian consumers and businesses.
Upon designation, a platform must then comply with obligations for that service.
There will be general obligations on any designated platform, complemented by service‑specific obligations.
This will provide flexibility to tailor the rules for the diversity and pace of change within the digital economy.
This approach will achieve an uplift in consumer rights and lead to a more competitive market -
Allowing consumers to reap the benefits from innovation in the digital services on which we all rely.
How the new competition framework will deliver for consumers
The general obligations will be contained in primary law and will target anti‑competitive behaviours common across services.
Examples of these behaviours include -
- Where a platform preferences their own products unfairly.
- Where a platform forces consumers to buy one of their products to use another product.
- Where a platform prevents consumers from switching to better alternatives.
We want to knock these practices on the head.
We want to lift transparency in a sector that has often been shrouded in secrecy so that consumers get a fair go.
And that small businesses have a chance to deliver good products to the market.
Initially, we will look to prioritise app marketplaces and ad tech services for service‑specific obligations.
These service‑specific obligations would restrict a scenario where platforms push their own apps to the top of a search list.
A consumer might be pushed towards these apps thinking other consumers have rated it highly.
But there's often an unseen algorithm that is pushing the platform's own apps to the top of the list, regardless of quality.
This behaviour is pervasive in other services.
In digital advertising, a platform can provide favourable treatment to its own services, compared with third‑parties.
The service‑specific obligations would also remove restrictions that prevent developers from providing consumers alternative payment methods.
Or prevent consumers from deleting unwanted apps.
There will be restrictions on tying the use of a service to the purchase of another product.
We will remove barriers to consumer switching, which might prevent consumers from using cheaper or better alternatives.
These tailored rules will provide detailed guidance for designated platforms on how to meet the broad obligations in primary law.
Compliance
The ACCC will oversee compliance with the new framework, with penalties up to $50 million where necessary, or 30 per cent of a company's turnover.
The purpose of this new framework is to drive better outcomes for consumers.
Healthy competition in the economy should mean consumers can buy from businesses that offer quality products that consumers want.
Big businesses can provide quality, but consumers should be able to choose to buy from them based on what they offer, not based on their size alone.
This framework will lead to more choice, lower prices and fairer outcomes for consumers.
And it will level the playing field for small businesses and give them a chance to compete with good, innovative ideas.
Conclusion
These reforms are in keeping with a great Labor tradition.
Modernising our economy and the regulation of economic activity in a way that reflects our values and asserts our sovereignty.
We are a trading nation, with a developed economy that is integrated into the economies of the world.
We will ensure that we are well placed to reap the benefits of those trading relationships -
All the while defending our sovereign right as a nation to set the rules which govern business practices in Australia in the digital age.
We will do this in a way that protects the rights and interests of Australians - as consumers, as the operators of small businesses, as innovators, and as participants in a digitally enabled society.
