26 September 2023

ACCC points finger at online marketplaces

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The Australian Competition and Consumer Commission (ACCC) has called for more consumer protections when doing business in online retail marketplaces.

In the Commission’s fourth interim report on its Digital platform services inquiry, Chair of the ACCC, Gina Cass-Gottlieb said the report highlighted a range of concerns about how marketplaces such as Amazon Australia, Catch, eBay Australia and Kogan operated.

“Concerns include the use of algorithms to decide how products are ranked and displayed (including some marketplaces giving preference to their own products), the collection and use of consumer data, inadequate dispute resolution processes and a need for more consumer protections,” Ms Cass-Gottlieb said.

“[The report] examined whether online marketplaces are promoting fair and competitive markets for consumers and sellers,” she said.

“It found that online marketplaces have a high level of control and involvement in transactions between consumers and sellers on their platforms.”

Ms Cass-Gottlieb said the report also discovered consumers’ and sellers’ concerns about the way online marketplaces displayed and ranked products on their platforms.

She said online marketplaces needed to be more transparent with consumers and sellers about how they operated.

“For example, they should explain to consumers and sellers why their search functions and other tools promote some products over others,” she said.

“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.”

Ms Cass-Gottlieb said marketplaces used algorithms and other practices that had a significant impact on the purchasing decisions of consumers and could be used to provide preferential treatment to the hybrid marketplaces’ own products.

She said the ACCC had concerns about particular examples of self-preferencing by hybrid marketplaces in Australia, which often mirrored similar concerns raised by overseas regulators.

“The report highlights the large amounts of consumer data collected and used by online marketplaces, which may not align with the privacy preferences or expectations of many consumers,” Ms Cass-Gottlieb said.

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

The ACCC’s 90-page Report can be accessed at this PS News link.

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