The national consumer watchdog has vowed to take action against businesses that “optimise” false or manipulative practices through social media and online marketplaces.
Digital customer journeys occurring at speed and scale were creating a “race to the bottom”, Australian Competition and Consumer Commission chief Luke Woodward warned on Tuesday.
“Firms compete not by offering better products, services, or price, but by manipulating choices and obscuring information,” he said.
“Conduct that once affected one customer at a time can be deployed online to millions.”
The watchdog chief outlined its digital enforcement agenda at the Mallesons Digital Future Summit, saying it would prioritise action against harmful conduct, particularly involving “material consumer harm”.
“But we’ll also focus more broadly on general deterrence, and so that means that we’re focusing on senior leadership accountability, and compliance practices and systems and culture,” Mr Woodward said.
The ACCC was taking action on deceptive and manipulative online sales practices, subscription and service practices, misrepresenting consumer guarantees, and the offering of unsafe products.
Recent matters had involved large and small online traders, digital and social media platforms.
“We’ve sought outcomes including stopping conduct … (and) consumer redress, but we’ve also sought significant court penalties to support general deterrence.”
Digital platforms had become a pathway for overseas traders with no Australian presence and no direct accountability to sell unsafe products, Mr Woodward said.
Other areas of focus frequently raised by consumers were guarantees on products being misrepresented and undermined, and unfair contract terms.
New restrictions on unfair trading practices under Australian Consumer Law take effect next July and this would “enhance our ability to address harmful conduct”, Mr Woodward said.
The new regime comprises a general prohibition on unfair trading practices, mandatory disclosure requirements for drip pricing and new obligations governing subscription contracts, with significant penalties for non-compliance.
Product safety was another priority for the ACCC, which is working with platforms such as the Australian Product Safety Pledge.
“The pace at which unsafe products can reach consumers online is unlike anything we’ve seen before,” Mr Woodward said.
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