ACCC concerns about Amazon, Catch, eBay and Kogan

The Australian competition watchdog has raised a ‘range of concerns’ about how Amazon, Catch, eBay and Kogan operate.

An inquiry by the Australian Competition and Consumer Commission has raised a number of concerns about how Amazon, Catch, eBay and Kogan treat their customers.

In the fourth report released by the ACCC’s Digital Platform Services Inquiry on Thursday, the competition watchdog scrutinized whether online retail marketplaces are providing strong protections for buyers and promoting fair and competitive markets for sellers.

“Online marketplaces have an important role in connecting Australian consumers and sellers, and make up a growing share of consumer sales”, ACCC Chair Gina Cass-Gottlieb said.

One of the ACCC’s chief concerns was how online marketplaces use algorithms and other measures to decide how products are ranked and displayed, including how they give preferential treatment to their own products.

“We are concerned about their impact on both consumers and third-party sellers who rely on online marketplaces to reach their customers,” Ms Cass-Gottlieb 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.”

Other issues that the consumer watchdog identified were how the data of consumers was being used and collected and the need for better dispute resolution mechanisms and additional consumer protections (for example, companies are currently not obliged to provide safe products under Australian law).

“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.”

In partnership with other online retail marketplaces, the ACCC has established a voluntary Australian Product Safety Pledge for online businesses to sign which improves consumer safety. Signatories to the Australian Product Safety Pledge are required to remove unsafe product listings within two business days.

In the next report published by the Digital Platform Services Inquiry, the ACCC will be determining 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 could exercise a certain level of market power or, potentially, act as a gatekeeper between businesses and consumers,” Ms Cass-Gottlieb said.

The ACCC’s report noted that no online retail marketplaces dominated in Australia but that it was possible for the market to ‘tip’ in favor of one of them.

In 2020 to 2021, Amazon, Catch, eBay Australia and Kogan jointly had $8.4 billion in marketplace sales, with eBay Australia at $5.3 billion, Amazon at $1.3 billion, Catch at $946 million and Kogan $865 million.

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