Australian Regulator Warns Rapid AI Expansion Is Outpacing Competition & Consumer Safeguards

Key Takeaways

• AI Is Becoming Core Digital Infrastructure: AI capabilities are increasingly integrated into major digital platforms, raising concerns about market concentration, barriers to entry, and reduced consumer choice.
• Agentic AI Introduces New Competition Risks: Autonomous AI agents could change how consumers interact with businesses and platforms, while also creating novel risks such as unintended coordination or collusion.
• Investment Activity Is Intensifying: Large technology firms are making significant investments across the AI supply chain, including infrastructure build-out, partnerships, and talent-driven acquihires that warrant close scrutiny.
• Consumer Harms May Be Amplified by AI: Generative AI is being used to facilitate misleading claims, fake reviews, ghost websites, and more convincing online scams.
• Data Use Remains a Flashpoint: Most consumers expect consent before their data is used to train AI models, yet data collection and use often occur without clear or informed consent.

Deep Dive

Artificial intelligence is moving from novelty to infrastructure at a pace that is increasingly difficult for regulators to ignore. According to a new industry snapshot from the Australian Competition and Consumer Commission, AI is rapidly becoming embedded across products, platforms, and services in ways that could reshape competition, consumer trust, and market dynamics. While the ACCC acknowledges the growing benefits AI is delivering to businesses and consumers, it warns that the pace and scale of adoption are outstripping existing oversight frameworks, strengthening the case for continuous regulatory monitoring.

The snapshot tracks how AI technologies have evolved since the ACCC delivered its Final Report of the Digital Platform Services Inquiry in March 2025. While the commission acknowledges the benefits AI is already delivering to consumers and businesses, it also cautions that the speed and scale of recent developments demand sustained regulatory attention.

“AI-enabled products and services are growing more and more important to consumers and businesses across Australia,” ACCC Chair Gina Cass-Gottlieb said. “New developments have the potential to transform how Australians work, communicate, and engage with digital services. However, they also come with risks of potential harms to consumers and competition.”

AI Is Becoming Embedded in Digital Platforms

One of the ACCC’s central concerns is how quickly AI capabilities are being woven into existing digital platform services, many of which are controlled by large global technology firms. The snapshot points to advances in foundation models, generative AI, and the emergence of agentic AI systems that can autonomously perform tasks with minimal human input.

As AI matures, the commission says these integrations are becoming deeper and more interconnected. While this can improve user experience, it may also make markets harder to contest.

“Our snapshot has outlined increasing interconnections between AI offerings and existing digital platform services,” Cass-Gottlieb said. “While these integrations can improve user experience, they may also have negative implications by raising barriers to entry or expansion, and consumers’ ability and willingness to switch service providers.”

Agentic AI, in particular, could reshape how users search for information, interact with businesses, or navigate online services. The ACCC also flags the risk that autonomous systems could behave in unexpected ways, including the possibility of AI agents coordinating or colluding, even without explicit human instruction.

Investment Frenzy Raises Oversight Challenges

The snapshot also highlights the intensity of investment activity across the AI ecosystem. Major digital platforms and AI developers are pouring capital into infrastructure, partnerships, and talent to support increasingly powerful models and meet future demand.

This includes aggressive competition for scarce technical expertise, sometimes through “acquihires,” where the primary goal of a deal is access to skilled personnel rather than products or customers. The ACCC said it will continue to closely monitor acquisitions, partnerships, and conduct in the Australian market as AI investment accelerates.

Consumer Risks Scale With Adoption

As AI tools become more widespread, the ACCC warns that long-standing consumer risks may be amplified rather than replaced. The snapshot points to concerns around data collection, transparency, misleading representations, fake reviews, and online scams that are increasingly enhanced by generative AI.

Research commissioned for the ACCC’s March 2025 inquiry found that 83 percent of surveyed Australian consumers believe companies should obtain consent before using personal data to train AI models. Yet the snapshot notes that vast amounts of consumer data are already being collected and used for training, often without clear or informed consent, partly due to complex and opaque privacy policies.

The commission also points to the growing use of generative AI to create misleading content. Ghost websites can use AI-generated images and text to appear legitimate, while product listings may exaggerate quality or performance. Fake reviews generated at scale by AI systems can appear more persuasive and are increasingly difficult for consumers to spot.

Scammers, the ACCC warns, are also adopting AI to make fraud more convincing and harder for victims to detect.

Renewed Push for Ongoing Monitoring

For the ACCC, the developments outlined in the snapshot reinforce the case it has been making for several years: that fast-moving digital technologies require continuous oversight, not one-off interventions.

“The continued rapid pace of developments in AI, and growing variety of AI applications, underscores the need for continued monitoring by regulators and governments,” Cass-Gottlieb said.

The commission reiterated its support for the Australian Government’s proposed digital competition regime, which would give the ACCC a formal monitoring role for emerging technologies. It also continues to advocate for a coordinated, whole-of-government approach to digital regulation, including establishing the Digital Platform Regulators Forum as a permanent, well-resourced body.

The snapshot builds on the ACCC’s five-year inquiry into digital platform services, which concluded that existing competition laws alone are unlikely to be sufficient to address the scale and complexity of risks emerging from AI-driven markets.

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