Australia’s competition watchdog says rapid advances in artificial intelligence are reshaping digital markets, intensifying competition for infrastructure and talent while introducing new risks for consumers, according to a new industry snapshot released in December.
The Australian Competition and Consumer Commission’s report, “Recent developments in artificial intelligence,” outlines how generative AI systems have become significantly more capable over the past year, with new models demonstrating advanced reasoning, multimodal capabilities and the ability to simulate real-world environments. The ACCC notes that these improvements are occurring at a pace that is outstripping existing benchmarks used to evaluate AI performance, prompting the creation of new measurement tools.
The report highlights the emergence of “agentic AI” systems—software agents that can autonomously perform tasks such as making purchases, managing workflows or interacting with other systems on behalf of users. Major technology firms, including Google, Microsoft, OpenAI and Amazon, have released agentic products and frameworks in 2025, expanding the role of AI beyond passive assistance into active decision-making. While these tools offer efficiency gains, the ACCC warns they may also introduce new regulatory challenges, including liability questions and the risk of AI agents learning to collude or behave in unexpected ways.
Investment in AI infrastructure continues to surge, driven by demand for computing power and data centres needed to train and deploy increasingly complex models. The ACCC estimates combined capital expenditure by Google, Meta, Microsoft and Amazon could reach A$627 billion in 2025, reflecting intense global competition across the AI supply chain.
At the consumer level, the watchdog raises concerns about the growing use of personal data to train and personalise AI systems, often without users’ full awareness. The report flags risks ranging from misleading AI-generated product descriptions and fake reviews to the use of AI in scams and manipulative design practices. It also cautions that tighter integration of AI into digital ecosystems could increase switching costs and entrench the market power of large platforms.
Given the speed and scale of change, the ACCC says ongoing monitoring will be essential. The snapshot marks the first time the regulator has independently examined an emerging digital technology outside a formal inquiry, signalling closer scrutiny of AI’s impact on competition and consumer protection in Australia.
Need Help?
If you have questions or concerns about any global guidelines, regulations and laws, don’t hesitate to reach out to BABL AI. Their Audit Experts can offer valuable insight, and ensure you’re informed and compliant.
