As part of its ongoing digital platform services inquiry, the Australian Competition and Consumer Commission (ACCC) will examine consumer concerns regarding general online marketplaces, setting its sights on the likes of Amazon Australia, eBay Australia, Kogan and Catch.com.au.
General online retail sites such as these allow individuals and small and large businesses to advertise a broad range of products, subject to the platform’s terms, conditions and fees.
For many of the third parties that list with a general marketplace, the payoffs include an increase in visibility and the option to contract out some services like warehousing, packing and shipping, even if they would make more selling directly to consumers, without the middleman.
But small businesses in particular might be feeling the squeeze with consumers shifting to online shopping in record numbers.
Online spending was at an all-time high in 2020, with Australians shelling out $50.5 billion, a 57 per cent increase year-on-year, according to the ACCC. By comparison, that figure stood at $27.5 billion in 2018.
In May 2021, 14.2 of purchases across Australia, not including spending on food and groceries, were transacted online. That’s up from 10.9 per cent in February 2020.
Though the surge in consumers switching to online shopping is not surprising given the circumstances created by the COVID-19 pandemic, it has still left the ACCC concerned about how this behaviour might affect competition in Australian markets, particularly given large general marketplaces capture many of the sales.
Small business ombudsman Bruce Billson is in favor of the regulatory body’s investigation, noting that online marketplaces posed both a challenge and opportunity for Australian businesses.
“We welcome the ACCC’s interest in this area, as it’s an important and growing channel for small and family businesses engaging with their customers,” Mr Billson told Business NSW.
Mr Billson noted his office often fields enquiries from small businesses with concerns about the practices of online marketplaces.
“Some small businesses have found navigating regulatory requirements on global marketplaces complicated. For example, the marketplace has refused to allow them to sell their product to Australian consumers because it’s prohibited in another country they operate within,” Mr Billson said.
Additionally, the ASBFEO has received a number of requests for help from businesses who have faced issues when their accounts were deactivated for no apparent reason, cutting off an important outlet for sales.
“Often they have had great difficulty trying to contact somebody to remedy whatever the concern is,” Mr Billson said.
The ACCC is currently seeking submissions from small businesses, consumers, third-party sellers and major brands to inform its research.
“These online marketplaces are an important and growing segment of the economy, so it is important that we understand how online marketplaces operate and whether they are working effectively for consumers and businesses,” ACCC chair Rod Sims said.
“We want to be sure that the rules that apply to traditional retail are also complied with in the online context. We are keen to hear about the experiences of Australians, both consumers and businesses.”
Casting a wide scope, the ACCC will be looking at pricing practices, the terms and conditions imposed on third-party sellers, and the implications of the marketplace itself operating as a seller on the platform, as many do.
From a consumer standpoint, the ACCC will be looking at how the platforms manage and store user data, how complaints are handled, and their practices around collecting and publishing reviews.