ACCC puts online marketplaces including Amazon, eBay, Kogan on notice

Australia’s consumer watchdog has flagged privacy and competition concerns with some of the nation’s largest online stores.

ACCC chair Gina Cass-Gottlieb. Picture: Sam Ruttyn

The consumer watchdog has flagged competition and user privacy concerns with Australia’s largest online marketplaces, including Amazon, Catch, eBay and Kogan, in a new report.

The use of mysterious algorithms to decide how products are ranked, the collection and use of consumer data, inadequate dispute resolution processes and the need for more consumer protections were all flagged as areas of concern in the report, which represents the ACCC’s latest tech probe.

“Online marketplaces need to be more transparent with consumers and sellers about how they operate. For example, they should explain to consumers and sellers why their search functions and other tools promote some products over others,” ACCC chair Gina Cass-Gottlieb said in a statement.

Catch and Kogan in particular were named as examples of “hybrid marketplaces”, which sell both third-party products and their own products, and use algorithms to “boost” their own products sold on their websites.

“We are particularly concerned about so-called hybrid marketplaces, which sell their own products in competition with third-party sellers that use their platform. Hybrid marketplaces, like other vertically-integrated digital platforms, face conflicts of interest and may act in ways that advantage their own products with potentially adverse effects for third-party sellers and consumers.”

The ACCC also flagged the platforms’ use of consumer data, noting more consumer protections are likely necessary, including joining the Product Safety Pledge, which commits companies to removing listings of products deemed unsafe within two business days.

“We believe consumers should be given more information about, and control over, how online marketplaces collect and use their data,” Ms Cass-Gottlieb said.

“Given the important intermediary role performed by online marketplaces between consumers and sellers, it is also important that marketplaces have protections in place for consumers using their services.”

The report also found that while Amazon Australia’s sales remain significantly lower than eBay Australia and other Australian retailers, such as David Jones, Myer, Kmart, and Target, it is growing the fastest out of all of those online platforms.

Ms Cass-Gotlieb flagged a range of potential fixes including a minimum internal dispute resolution requirement for digital platforms and the establishment of an ombudsman scheme to resolve consumer and business complaints, as well as a prohibition on certain unfair trading practices.

The ACCC is also considering whether Australia needs a new regulatory framework to address competition and consumer concerns with digital platform services more broadly.

“Any such framework should be able to be applied to an online marketplace if it reaches a position where it is could exercise a certain level of market power or, potentially, act as a gatekeeper between businesses and consumers,” Ms Cass-Gottlieb said.