Lee, Karen; Wilding, Derek --- "The ACCC s Proposed Digital Platform Ombuds Scheme: Does It Go Far Enough?" [2022] ANZCompuLawJl 8; (2022) 94 Computers & Law, Article 8

• I BACKGROUND
• II A NEW INDEPENDENT EXTERNAL OMBUDS SCHEME?
• III AN EXPANDED TIO?
• IV EXPANDED TIO IS PREFERABLE BUT MULTIPLE TYPES OF COMPLAINTS ARE LEFT WITHOUT ANY MEANS OF EXTERNAL RESOLUTION

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THE ACCC’S PROPOSED DIGITAL PLATFORM OMBUDS SCHEME: DOES IT GO FAR ENOUGH?

KAREN LEE^[*] AND DEREK WILDING^[†]

ABSTRACT

A proposal by the Australian Competition and Consumer Commission for the establishment of a new Digital Platform Ombuds Scheme is being considered by the Australian government. Drawing on our research into options for digital platform complaint handling, and a round table consultation we held with industry, government and consumers at the end of 2022, we support the proposal and also suggest that the existing Telecommunications Industry Ombudsman scheme could be adapted for this purpose. Using a typology for digital platform complaints that we developed as part of our research, we observe that the proposed ombuds scheme would cover only ‘transactional’ type disputes between end-users and platforms, such as unmet contractual obligations. Recognising the likely expansion of complaints between end-users, and the fluidity of complaint types, we argue for a more comprehensive approach that would address a broader range of complaints, coupled with the development of internal dispute resolution standards.

CONTENTS

In November 2022, the Australian Competition and Consumer Commission (ACCC) recommended the creation of a new independent external ombuds scheme to help address the market power imbalance that exists between consumers and digital platforms.^[1] Government is now deciding whether a new scheme is warranted or if an existing body such as the Telecommunications Industry Ombudsman (TIO) should undertake ‘any or all functions proposed for the new body’.^[2]

Drawing on our research, report and round table consultation exploring options for an external dispute resolution scheme for digital platforms,^[3] we argue that, while an expanded TIO is preferable, the adoption of either option would be a significant, positive step forward for consumers. However, with its narrow focus on what can be characterised as ‘transactional’ complaints that users make against platforms, the proposed scheme leaves consumers and citizens without an external avenue to resolve complaints against platforms that are more ‘social’ in nature, as well as complaints that users make against each other (rather than against the platform itself). Attention needs be directed to the former in the medium term (if not sooner) and to the latter in the medium to longer term.

I BACKGROUND

In its 2019 Digital Platforms Inquiry (DPI) Final Report, which included a series of recommendations designed to address the market power of some digital platforms, the ACCC made two suggestions for improving the way platforms handle complaints from customers.^[4] Recommendation 22 proposed that the Australian Communications and Media Authority (ACMA) develop standards that would apply to internal dispute resolution (‘IDR’), while Recommendation 23 proposed the establishment of an ombuds scheme to deal with escalated complaints under external dispute resolution (‘EDR’). The ACCC suggested the TIO be considered for the role, or if that were not feasible, then a standalone ombuds be established. The ACCC also said any ombuds scheme should be expected to adjudicate complaints relating to scam content, business users’ complaints involving advertising campaigns and suspended business accounts, but added the ACMA should ‘consult broadly to identify all areas which could benefit from the recommended ombudsman scheme.’^[5]

The then Coalition government did not endorse the ACCC’s suggestion concerning the ACMA, but it gave in-principle support to Recommendations 22 and 23, proposing that the ACCC work with the major platforms on a pilot EDR scheme that could inform any decision to establish a Digital Platform Ombudsman.^[6] By 2021, the Department of Infrastructure, Transport, Regional Development and Communications commissioned some background research into digital platform complaints.^[7] However, a pilot EDR scheme with the major platforms was never developed.

In 2022, the ACCC repeated its call for the adoption of IDR standards and an external ombuds scheme in a Discussion Paper^[8] and Interim Report No 5^[9] relating to its Digital Platform Services Inquiry. However, in Interim Report No 5, published in November, the ACCC changed its thinking about the body that should perform the role of an ombuds. Whereas previously it had suggested that the TIO could be considered, the ACCC concluded that ‘an industry-specific ombuds would be preferable given that an existing body may not have the capability and capacity to undertake this role’.^[10] In addition, although it suggested further consideration should be given to the types of disputes the ombuds should handle, the ACCC indicated the scheme would primarily be expected to resolve user complaints concerning the conduct of the digital platforms involving customers’ unmet contractual expectations (eg decisions to suspend services or terminate their accounts) and/or infringement of an amended Australian Consumer Law (ACL).^[11]

Existing industry ombuds and regulators do not currently have jurisdiction to resolve any of the complaints mentioned by the ACCC in Interim Report No 5. Consequently, if digital platform customers are to have recourse to EDR for these complaints, a new independent body will need to be created or the functions of an existing body expanded. A key question is which option is best?

II A NEW INDEPENDENT EXTERNAL OMBUDS SCHEME?

A new body would avoid some of the complexities, identified in our July 2022 report,^[12] involving modifications to the constitutions and funding arrangements of existing schemes.^[13] In the case of the TIO, modifications would be needed to accommodate an expansion of its memberships to digital platforms – arguably enabling faster scheme set up and quicker redress for consumers. In contrast, a new scheme would involve the creation of a brand new body and require this body to set up the kind of administrative frameworks under which existing schemes operate. It would also require resources to educate consumers about the new scheme to ensure the scheme had some consumer brand recognition – recognition that existing schemes already enjoy. Further, a new ombuds scheme might not be able to fully leverage the deep knowledge and expertise of dispute resolution gained by existing schemes. Existing regulators and schemes would need to be willing to work with the new stand-alone scheme. And given the possibility of some complaints made to the new body raising additional matters that fall within the jurisdiction of multiple regulators and schemes, the development of new memoranda of understanding and other administrative arrangements between all potentially relevant parties would be needed.

III AN EXPANDED TIO?

In our July 2022 report, we also considered whether nine existing bodies and regulators could potentially handle the types of complaints identified by the ACCC in its DPI Final Report.^[14] However, our review of them suggested that the TIO was the only existing body that could perform the functions the ACCC is now suggesting should be performed by a new ombuds scheme. This was not because of any perceived failings on the part of the other bodies; rather, the other bodies all have functions that render them ill-equipped to take on user-to-platform transactional complaints, or the addition of those complaints would be likely to impede their existing work. Moreover, the TIO itself acknowledged in its 2019 submission on the government’s response to the ACCC’s DPI Final Report that complaints like the ones the ACCC highlighted in its DPSI Report No 5 are a natural fit for an expanded TIO.^[15] This is because the TIO currently administers a resolution scheme based on similar consumer complaints about telecommunications service providers.

An expanded TIO would have the advantages of reducing some of the brand-generation and recognition costs and potential for consumer confusion likely to arise as a result of the creation of yet another external complaints scheme. This is especially the case given the TIO has reported that consumers already contact it seeking resolution of digital platform complaints.^[16] Using the TIO would also avoid the need to replicate existing administrative frameworks and procedures and allow it to bring its 30 years of experience and successful track-record with dispute resolution in the telecommunications sector to digital platforms.

However, existing regulators and schemes would need to be willing to continue to work with an expanded TIO, requiring changes to their memoranda of understanding and other administrative arrangements to facilitate the smooth operation of the scheme. In addition, the TIO would need to agree to take on this additional function and be adequately funded by government (at least in the short term) to acquire the necessary capabilities and capacities to perform this role.

IV EXPANDED TIO IS PREFERABLE BUT MULTIPLE TYPES OF COMPLAINTS ARE LEFT WITHOUT ANY MEANS OF EXTERNAL RESOLUTION

We agree with the ACCC that the body entrusted with resolving user complaints involving unmet contractual expectations and potential ACL infringement by the digital platforms must have the capability and capacity to do so. But the ACCC does not make it clear why the TIO may not. The number of complaints involved is likely to be very high, but without further information, and subject to adequate funding of the TIO and swift adoption of any necessary amendments to the Telecommunications (Consumer Protection and Service Standards) Act 1999 (Cth) and the TIO’s constitution, we do not see why the TIO could not perform this additional function should it wish to, and the other regulators and schemes with which it currently works agree. Our preference therefore is for the TIO to assume these new responsibilities. However, as our analysis highlights, adoption of a new digital platform ombuds scheme is an equally acceptable way forward.

A more important concern in our view is the limited remit of the proposed independent external ombuds scheme (whether new or an expanded TIO) – a point we illustrate below by reference to the typology of complaints developed in our July 2022 report, which focused on social media platforms and the leading social media service in Australia – Facebook.^[17]

We determined that complaints can be about the conduct of the social media platforms themselves or about the conduct of third-party users of those platforms, including advertisers, sellers and users who post content. Further, they can be distinguished as social disputes based on, for example, harmful content one user posts about another, or complaints against a platform for exposure to illegal content, misinformation or other harmful material; or transactional disputes often involving unmet contractual expectations but sometimes involving misuse of user data etc.^[18]

Using these distinctions, complaints can be grouped into four categories:

• user-to-platform transactional complaints

• user-to-user transactional complaints

• user-to-platform social complaints

• user-to-user social complaints.

Table 1 below shows how we classified the various complaints involving social media platforms using this typology.

Table 1. Types of complaints made about content and conduct on digital platforms

The complaints listed in the table are not intended to be exhaustive and we were and remain conscious that some topics of complaint (eg, privacy breaches, spam and unwelcome notifications of communications) could be allocated to another category or more than one category. It is also possible that a user-to-user social complaint (eg, one about extremist content) could become a user-to-platform transactional complaint, if, for example, the user’s account were suspended or cancelled as a result of the extremist content and the account owner made a complaint. In addition, what may begin as a user-to-user dispute may become a user-to-platform dispute where one or more of the users considers the platform has failed to fulfil its obligations (where they exist) relating to the resolution of user-to-user disputes.

Despite these qualifications, the typology allows us to highlight that the examples of complaints cited by the ACCC in DPSI Report No 5 are mostly ‘transactional disputes’. They largely encompass user-to-platform complaints, but also include some user-to-user complaints (eg, reporting and removal of scams and fake reviews). Two important consequences flow from this.

1. There will be no external means of resolving many types of user-to-platform social complaints that arise on social media platforms if the ACCC’s proposed scheme were adopted: existing regulators and industry schemes do not have jurisdiction over these types of complaints. Examples of such complaints include the failures of social media platforms to discharge their obligations in relation to: disinformation and misinformation (apart from the narrow category of complaints under the Australian Code of Practice on Disinformation and Misinformation^[19] that amount to failure to implement systems and processes); news content and breaches of community standards in advertising content (where the complaint is about how the platform itself treats that content); election advertisements (except for the narrow category of actions covered by some electoral laws); censorship; disclosure of confidential or protected information; and damage to reputation (apart from the narrow class of actions against platforms that might succeed, at great expense, via the law of defamation).

2. The proposed ombuds would have no jurisdiction to resolve user-to-user complaints (social and transactional).

To overcome these weaknesses, attention should be directed in the medium term (if not sooner) to how an independent external ombuds (new or an expanded TIO) could be modified to accommodate user-to-platform social complaints disputes. This is especially important given the possibility of user-to-platform transactional complaints becoming user-to-platform social complaints (and vice versa), and user-to-user complaints becoming user-to-platform complaints (and vice versa).

Consideration should also be given to how internal dispute resolution standards could be used to encourage platforms to provide effective means of resolving disputes between users (eg, online dispute resolution) over matters that arise as a result of the use of the platform, apart from the schemes administered by Ad Standards and the Australian Press Council which provide a forum for the resolution of complaints about the content of advertising and news. Social disputes are likely to increase; there is a strong public policy argument for encouraging social media providers to fund easily accessible and no-cost dispute mechanisms; and there is an additional community benefit in helping to address defamation claims in a forum that helps claimants – and courts – avoid the costs of defamation litigation.

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^[*] Senior Lecturer, Faculty of Law, University of Technology Sydney.

^[†] Professor, Faculty of Law, University of Technology Sydney and Co-Director, UTS Centre for Media Transition.

^[1] ACCC, Digital Platform Services Inquiry: Interim Report No 5 – Regulatory Reform (September 2022) 16.

^[2] Treasury, Digital Platforms: Government Consultation on ACCC’s Regulatory Reform Recommendations, Consultation Paper (December 2022) 9.

^[3] See Holly Raiche, Derek Wilding, Karen Lee, and Anita Stuhmcke, Digital Platform Complaint Handling: Options for an External Dispute Resolution Scheme (UTS Centre for Media Transition, 2022). See also UTS Centre for Media Transition, Submission to ACCC Discussion Paper for Interim Report No. 5: Updating competition and consumer law for digital platform services, April 2022 and Submission to The Treasury, Digital Platforms: Government Consultation on ACCC’s Regulatory Reform Recommendations, 22 February 2023. The round table was held at UTS on 7 December 2022.

^[4] ACCC, Digital Platforms Inquiry: Final Report (June 2019) 37-38.

^[5] Ibid 509.

^[6] Australian Government, Regulating in the Digital Age: Government Response and Implementation Roadmap for the Digital Platforms Inquiry (Policy Statement, December 2019) 13. On 13 October 2022, ACMA announced it would undertake research into digital platform reports and complaints over the next 12 months. ACMA, ‘ACMA Releases 2022-23 Research Program’ (Media Release, 13 October 2022).

^[7] This research was commissioned and completed in 2021 but was not published.

^[8] ACCC, Digital Platform Services Inquiry Discussion Paper for Interim Report No 5: Updating Competition and Consumer Law for Digital Platform Services (February 2022) 51.

^[9] Interim Report No 5 (n 1) 74-107.

^[10] Ibid 103.

^[11] For information about the ACCC’s proposal to amend the ACL, see ibid 64-71.

^[12] Raiche, Wilding, Lee and Stuhmcke (n 3) 44-5.

^[13] A ‘purpose-built’ digital platform scheme might also facilitate nimbleness and flexibility (eg, if the government decided in the future to expand the scheme to include user-to-platform social complaints). See further below.

^[14] They included the TIO, eSafety, ACMA, the Digital Industry Group Inc (DIGI), the ACCC, the OAIC, the Australian Small Business and Family Enterprise Ombudsman, Ad Standards, the Australian Press Council and other news standards organisations. See Raiche, Wilding, Lee and Stuhmcke (n 3) 24-35, 42-3.

^[15] Telecommunications Industry Ombudsman, Submission from the Telecommunications Industry Ombudsman to the Treasury’s Consultation on the Final Digital Platforms Inquiry Report (September 2019) 18. The TIO confirmed its suitability in its submission to Treasury on the ACCC’s recommendations. See TIO, Submission to the Commonwealth Department of the Treasury: Consultation on ACCC’s Regulatory Reform Recommendations (February 2023).

^[16] Ibid 6.

^[17] This was due to budgetary considerations.

^[18] This categorisation draws on the work of Ethan Katsh and Orna Rabinovich-Einy, ‘The Challenge of Social and Anti-Social Media’ in Ethan Katsh and Orna Rabinovich-Einy, Digital Justice: Technology and the Internet of Disputes (Oxford University Press, 2017) 109-130, 113. Katsh and Rabinovich-Einy limited their category of ‘social disputes’ to user-to-user disputes; we have expanded this category to include complaints that users might have against the platforms themselves.

^[19] Digital Industry Group Inc, Australian Code of Practice on Disinformation and Misinformation (22 December 2022). In June 2023 the government released an exposure draft of a Communications Legislation Amendment (Combatting Misinformation and Disinformation) Bill 2023 which, if implemented, would give the ACMA powers to register and enforce codes of practice as well as to create its own standards. One of the examples of matters that may be dealt with by codes and standards is ‘policies and procedures for receiving and handling reports and complaints from end-users’ (see cl 33(3)(i)).