Digital economy: key issues to look out for in 2026

2026 is shaping up to be an interesting year for technology developments and the digital economy. With the continuing rise of AI, evolving risk landscape, regulator activity and various government reviews focused on the regulation of technology, digital platforms and online safety, we expect to see further developments, policy proposals and law reform this year.

Regulation of artificial intelligence

On 2 December 2025, the Australian Government released its National AI Plan (Plan). The Plan signals the Australian Government's approach to AI regulation. For now, the Australian Government is adopting a "regulation where necessary approach". The Government proposes to rely on existing, technology-neutral laws to address and mitigate AI-related harms. Existing regulators and agencies will continue to be responsible for overseeing and addressing AI-related harms in their respective areas of responsibility. The Government is taking a considered and cautious approach to AI regulation. It remains to be seen whether this approach will be sufficient to keep pace with, and guard against, AI-related risks and harms or whether a heavier handed approach will eventually be needed.

Privacy law reform

The Attorney-General continues to lead work on modernising the Privacy Act 1988 (Cth) (Privacy Act) to be fit for purpose in today's digitally based economy. In 2025, we expected the second tranche of privacy reforms to be introduced into Federal Parliament to implement the more substantive proposals in the Privacy Act Review Report. A second tranche of reforms is expected, but the timing and scope remain unclear.

In Victoria, on 13 May 2025 the Victorian Legislative Assembly Economy and Infrastructure Committee published its inquiry report examining workplace surveillance. In November 2025, the Victorian Government provided its response. Based on the Government’s response, law reform to workplace surveillance laws is expected in due course, with further review and consultation on the privacy issues raised in the report.

Privacy regulatory activity

This year, the Privacy Commissioner is conducting its first compliance sweep by reviewing a select number of organisations' privacy policies for compliance with the Privacy Act. This activity suggests to us that the Privacy Commissioner will conduct regular compliance sweeps to assess organisations' compliance with a particular Australian Privacy Principle (APP) that is well understood and straightforward to comply with.

Now is a perfect time to review and update your organisation's privacy policy to mitigate the risk of being issued an infringement notice by the Privacy Commissioner for non-compliance with the APPs.

Regulator priorities

Regulators including the Office of the Australian Information Commissioner, Australian Competition and Consumer Commission, eSafety Commissioner and Australian Communications and Media Authority continue to monitor the risks and harms associated with emerging and high-impact technologies (eg AI and facial recognition technology) and online platforms.

The Therapeutics Goods Administration's compliance and enforcement activities to 31 March 2026 include a focus on software as a medical device (amongst 11 other priority areas). The TGA will review its priority areas of focus quarterly.

Digital duty of care

The Australian Government is committed to introducing a digital duty of care in response to a statutory review of the Online Safety Act 2021 (Cth). The Australian Government is currently developing a duty of care framework. The framework will establish a duty of care, requiring online service providers (such as digital platforms) to take reasonable steps to prevent foreseeable online harms to Australians.

If you have any questions about how these key issues may affect your organisation, please get in touch with our team.