New competition tsar Gina Cass-Gottlieb has outlined her priorities in the role, with a commitment to enforce the Consumer Data Right and protect consumer interests in the financial services sector.
Ms Cass-Gottlieb, who became chair of the Australian Competition and Consumer Commission (ACCC) in March, addressed the Australian Financial Review’s Banking Summit on Tuesday, saying the agency will particularly look to foster competition by focusing on digital wallets, debit card payment networks, digital platforms payments, conducting further market studies, and fighting scams.
Ms Cass-Gottlieb acknowledged the effort undertaken by the banking industry to comply with their obligations under the Consumer Data Right (CDR). The CDR allows consumers to transfer their personal data between firms. She also emphasised the ACCC’s commitment to enforcing consumer rights.
“We are excited to see more and more use cases for the CDR especially as we look to the addition of energy sector data sharing going live November 2022 and the further expansion of the CDR into telecommunication and finance,” Ms Cass-Gottlieb said.
“But while we appreciate how well the banking sector has taken up the CDR, we also take CDR compliance very seriously. To protect the integrity of the CDR we will consider enforcement action against data holders who are not meeting their obligations. We understand CDR obligations are sometimes complex, but the law now provides a data right for consumers and data holders need to meet their legal requirements.”
There are currently 112 banks and other related data holders in Australia that are active data holders in the Consumer Data Right representing more than 99 per cent of Australian household deposits. There are also 18 FinTechs and other companies that are CDR data recipients. A further 11 data recipients are undergoing onboarding.
Since its launch in July 2020, the CDR-powered Open Banking platform has had 30 million API calls, according to a report by FinTech firm Frollo.
From October 2022, the energy sector must make the consumer data they hold machine-readable before the consumers are given access the following month. This makes the CDR the first regime to include multi-sector data sharing.
Ms Cass-Gottlieb also said the ACCC will continue to bring to light anti-competitive behaviour through its Digital Platform Services Inquiry reports. Sources of market power for digital platforms already highlighted by ACCC reports include economies of scale, network effects and vertical integration.
Ms Cass-Gottlieb noted that the data collected by digital wallet services can lead to a range of anti-competitive practices and market power across services, highlighting the behaviour of Apple and Google in particular.
“One area where Apple engages in self-preferencing and restriction of competitor access to functionality is in its reservation of tap-and-go, contactless payments using the NFC chip on Apple mobile devices to its own Apple Pay app and Apple wallet,” Ms Cass-Gottlieb said.
“The ACCC’s inquiry has also reported that Apple and Google’s respective control over the App Store and Play Store enables each of them to impose terms that prevent app developers from using alternative payment systems for in app payments.”
The fifth Digital Platform Services Inquiry report will be delivered to government in September and is considering the need for a new regulatory framework to address the competition and consumer concerns highlighted in previous reports.
Another area of concern highlighted by Ms Cass-Gottlieb is investment scams, particularly against cryptocurrency scams.
“We are seeing a sharp rise in the number of people losing money through cryptocurrency both as a form of investment scams, as well as a payment method for scams more broadly. So far this year, more than $100 million has been reported lost to crypto investment scams,” Ms Cass-Gottlieb said.
“This is a challenging regulatory landscape due to how different legislation interacts. We are working closely with ASIC to ensure there are mechanisms in place that allow ASIC and the ACCC to take action under the Australian Consumer Law, or the ASIC Act and Corporations Act.
“This includes putting in place delegations and cross-delegations to deal with potential areas of overlap.”
“This year we instituted proceedings against Facebook’s parent company, Meta, for publishing scam advertisements promoting cryptocurrency and other money-making schemes that we allege amount to false, misleading or deceptive conduct.
“We continue to engage with ASIC on these issues and it’s great to see the private sector also working closely with government and law enforcement to prevent scams and protect Australians.”
Ms Cass-Gottlieb emphasised the need to regulate anti-competitive behaviour through payment networks as adoption of contactless “’tap-and-go’ payment technology continues to grow. The ACCC just launched proceedings against Mastercard on Monday due to alleged anti-competitive behviour since late 2017.
“The ACCC alleges that, in response to the least cost routing initiative, Mastercard entered into agreements with more than 20 major retail businesses, including supermarkets, fast food chains and clothing retailers,” Ms Cass-Gottlieb said.
“We allege the agreements gave these businesses discounted rates for Mastercard credit card transactions, provided they committed to processing all or most of their Mastercard-eftpos debit card transactions through Mastercard rather than the eftpos network. This meant that these businesses would not process significant debit card volumes through the eftpos network even though eftpos was often the lowest cost provider.
“This enforcement action is but one aspect of the broader work we will be undertaking in accordance with our focus on compliance in the financial services sector. Those in the sector should therefore be on notice that we will not hesitate to take action in response to concerns raised about anti-competitive conduct in this important sector of Australia’s economy.”
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