ACCC concerned with conduct of online marketplaces 

A study by competition watchdog the ACCC has found a range of concerns about online retail marketplaces such as Amazon Australia, Catch, eBay Australia and Kogan. 

The report, the fourth in the digital platforms inquiry, examined whether online marketplaces are promoting fair and competitive markets for consumers and sellers.

The use of algorithms to decide how products are ranked and displayed, including some marketplaces giving preference to their own products, was one of the main concerns.

The collection and use of consumer data, inadequate dispute resolution processes and a need for more consumer protections was also an issue. 

“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,” said ACCC chair Gina Cass-Gottlieb.  

“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.” 

Speaking about the large amounts of consumer data collected and used by online marketplaces, Cass-Gottlieb said consumer protection is vital. 

“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.” 

While none of the online marketplaces have reached a dominant position in Australia, the report noted that there is potential for the market to ‘tip’ in favour of a single dominant marketplace.

ACCC has raised concerns around anti-competitive behaviour or the reduction of benefits consumers and sellers would gain from competition if this were to happen. 

In its next Digital Platform Services Inquiry report, the ACCC is 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 itis could exercise a certain level of market power or, potentially, act as a gatekeeper between businesses and consumers,” Cass-Gottlieb said. 

In 2020–21, Amazon Australia, Catch, eBay Australia and Kogan jointly had totals of $8.4 billion in sales, an increase of 21% compared to 2019–20.