Treasury has opened a new consultation paper for feedback from industry and community stakeholders on the capabilities of the Australian Consumer Law (ACL) to continue protecting consumers amid the integration of artificial intelligence (AI) into society and the economy.

The responses to the paper will inform Treasury’s review into the implications of AI on the ACL, which followed in the wake of the Australian Government’s $39.9 million commitment over five years in the 2024-25 Budget to the development of policies to support the responsible and safe use of AI.

The paper said it would seek views on:

• how well adapted the ACL is to support Australian consumers and businesses to manage potential consumer law risks of AI-enabled goods and services,
• the application of well-established ACL principles to AI-enabled goods and services,
• the remedies available to consumers of AI-enabled goods and services under the ACL, and
• the mechanisms for allocating liability among manufacturers and suppliers of AI-enabled goods and services.

The consultation paper also builds off previous consultation conducted by the Department of Industry, Science and Resources (DISR) in June 2023, titled Safe and responsible AI in Australia. Treasury said this paper indicated there were several concerns raised by the public about how Australia’s existing consumer protection framework could handle issues induced by such a rapidly changing and new-age technology.

“Certain factors could result in certain AI-enabled goods and services being less ‘controllable’ than traditional goods and services. In this way, AI systems could impact the relationship between suppliers, manufacturers and consumers which the ACL regulates,” the consultation paper said.

“In particular, the incorporation of AI systems within goods and services may increase the risk that the good or service acquired by the consumer may deviate from that contemplated by the manufacturer or supplier. However, the development of AI-enabled goods and services does not automatically necessitate changes to the ACL.

“The ACL contains a combination of specific rules and principles-based standards which are technology neutral. To date, both consumers and regulators have been able to apply the ACL to circumstances involving both traditional and cutting-edge goods and services developed well after the ACL was enacted.

“Beyond consumer guarantees, the general protections contained in the ACL, as well as specific protections against false or misleading representations, are also important in managing the risks of AI-enabled goods and services. The opacity of AI systems and the potential difficulty in predicting AI system behaviour may increase the risk of false or misleading representations about AI-enabled goods and services.

“For example, a person supplying software which incorporates AI functionality will need to take care to ensure that representations about the capabilities of those AI-enabled functions are not false or misleading. This might be challenging for less sophisticated businesses integrating off-the-shelf AI systems.”

The consultation paper will close to new responses on 12 November.