"Watchdog’s duties may double" - op-ed on the ACCC's digital platforms inquiry

While workable complaint processes exist for almost every other essential service area, consumers and small businesses have no way to escalate complaints and achieve meaningful outcomes for disputes involving digital platforms.

So the Australian Competition & Consumer Commission has recommended the introduction of a world-first digital platforms ombudsman.

In 1993, Australia was also the first country to introduce a national industry-based telecommunications ombudsman. The Telecommunications Industry Ombudsman was established in response to the changing telecommunications landscape. Now that landscape is changing again.

Over the past 20 years, digital platforms have played an increasingly significant role in our daily lives. They are integral to running our businesses, communicating with family and friends, and remaining connected to our communities. As these channels become ubiquitous, it is not unexpected that digital platforms and telecommunications services are converging.

Consumers and businesses increasingly rely on these digital platforms for their basic communication needs. However, they often have little choice but to accept ineffective complaint resolution that, in my view, lacks transparency. This lack of effectiveness and transparency can result in an erosion of consumer trust and confidence in the industry as a whole. Recognising its track record as an effective dispute resolution scheme for the telecommunications industry, the report recommends the TIO work with the Australian Communications and Media Authority to investigate the feasibility of the TIO taking on the role of digital platforms ombudsman.

Digital platforms present unique challenges that will require considered legislative, industry and regulatory changes. Handling escalated complaints about these services is a natural extension of the industry-based ombudsman model, and leverages its expertise in applying consumer law and industry codes of practice.

The model has the benefit of a sound framework and robust systems and processes for handling complaints about losses suffered from relying on these services. A significant benefit of an industry based ombudsman scheme is that it can make determinations based on what is fair and reasonable in the circumstances, including, for example, requiring the digital platform to take action when a consumer has been wronged.

An ombudsman is well placed to handle complaints involving scams. In scams perpetrated through telecommunications services, for example, the TIO seeks to find a solution that addresses the harm suffered from the scam, and undertakes systemic investigations to improve provider practices and systems to prevent the issue recurring.

The ACCC’s proposal represents a fundamental shift in a new and evolving area. There will be new complexities to be navigated, and detailed consultation and discussion to be had about the scope of the digital platforms ombudsman scheme and the nature of complaints and disputes it would handle.

If the regulator sets out requirements for effective complaint handling by the digital platforms, and this is supported by an effective industry-based ombudsman, it will be a winning combination.

It is vitally important to get the design of the regulatory framework right. Fostering confidence and transparency in online transactions and communication will lead to better connected and informed societies, and improved economic outcomes for us all.

Judi Jones

This op-ed was published in The Australian on July 30, 2019.