ACCC “Concerned” About Online Marketplaces
The ACCC has outlined a number of concerns regarding Australia’s general online retail marketplace in its latest report.
The fourth report in its five-year Digital Platform Services Inquiry examined whether online marketplaces are promoting fair and competitive markets for consumers and sellers.
The ACCC focused on Amazon Australia, Catch, eBay Australia and Kogan, and notes the distinction between these and physical retailers such as David Jones or Big W, who also operate online.
It found that online marketplaces have “a high level of control and involvement in transactions between consumers and sellers” on their platforms.
“Online marketplaces have an important role in connecting Australian consumers and sellers, and make up a growing share of consumer sales. But we are concerned about their impact on both consumers and third-party sellers who rely on online marketplaces to reach their customers,” ACCC Chair Gina Cass-Gottlieb said.
Of particular concern is how marketplaces choose to rank and display products.
“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,” 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.
“We have concerns about particular examples of self-preferencing by hybrid marketplaces in Australia, which mirror similar concerns raised by overseas regulators,” Ms Cass-Gottlieb said.
Also of concern is the large amounts of consumer data collected and used by online marketplaces.
“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 lack of dispute resolution mechanisms on these platform was also highlighted. The ACCC is calling for a minimum internal dispute resolution requirement for digital platforms and the establishment of an ombudsman scheme.
“Other measures supported by the ACCC, including a prohibition on certain unfair trading practices, introducing a general safety provision, and making unfair contract terms illegal, could help address other issues identified in this report,” Cass-Gottlieb said.
Although none of the marketplace have anything nearing a monopoly, such a situation cannot be ruled out, and must be controlled
“There is potential for the market to ‘tip’ in favour of a single dominant marketplace,” the report notes.
“The ACCC would have significant concerns if tipping leads to a dominant marketplace behaving anti-competitively or reducing the benefits consumers and sellers would otherwise gain from competition.”