Consumer Protection in the Communications Industry: Moving to best practice - Issues Paper (July 2008)

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3.3. Internet

Co-regulation is the dominant form of regulation for the Internet. Codes of conduct are common and they are closely integrated with legislation such as the Broadcasting Services Act 1992.[31]

Relevant industry codes include:

• The Spam Code;
• The Content Code;
• The Gambling Code;
• The Privacy Code (Draft);
• The Cybercrime Code (Draft); and
• The Content Services Code for Industry Co-Regulation in the area of Content Services (Draft 2008).

Several of these Codes are required by law (Content, Gambling and Content Services).

The Internet Industry Association is itself a strong supporter of co-regulation:

Co-regulation is a method of sharing responsibility between business and government. This system is supported by the IIA in many areas because it can provide a flexible way of maintaining relevant and enforceable best practice standards within a rapidly changing communications environment. Pure self-regulation has problems because not all business will voluntarily meet best practice standards, leaving some users exposed. This can create a bad reputation for the industry as a whole and retard the uptake of e-commerce. In areas like privacy, we think there should be minimum protections which apply to all customers, whether or not the businesses they deal with choose to subscribe to an industry code. However, pure government regulation is problematic because the processes of making new laws is far too slow to keep up with rapid changes in technology. Co-regulation provides the strengths of both systems - keeping pace with change, and providing an industry-wide safety net for consumers.[32]

Some significant features of the co-regulatory approach in the Internet sector are:

• A small number of high profile, comprehensive codes are in place;
• Codes are closely integrated with legislation;
• The basic principles of consumer protection are set out in legislation – the codes elaborate on these principles and provide industry guidance on day-to-day compliance; and
• Code content can be (and has been) the subject of direction from the Government and the regulator.

Some problems have been identified regarding the consultation process for codes of conduct and a perceived lack of transparency regarding monitoring and enforcement mechanisms. However, some aspects of co-regulation appear to be working well in the Internet sector, considering how immature the industry is and how complex and fast-moving the consumer issues are for online services.

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[31] Internet Industry Association, Register of Codes, <http://www.iia.net.au/index.php?option=com_content&task=section&id=3&Itemid=33>

[32] Internet Industry Association, What is Co-regulation, 30 November 1998, <http://www.iia.net.au/index.php?option=com_content&task=view&id=100&Itemid=35>.

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