The Australian consumer watchdog has raised concerns about online retail marketplaces, such as Amazon Australia, Catch, eBay Australia and Kogan, after an investigation into whether they promote fair and competitive markets for consumers and sellers.
The report by the ACCC found that those marketplaces have a high level of control and involvement in transactions between consumers and sellers on their platforms.
The ACCC said one of the main issues was the use of algorithms in how products were ranked and displayed.
These algorithms and practices can be used to provide preferential treatment to the hybrid marketplaces' own products.
"We have concerns about particular examples of self-preferencing by hybrid marketplaces in Australia, which mirror similar concerns raised by overseas regulators," ACCC Chair Gina Cass-Gottlieb said.
"For example, they should explain to consumers and sellers why their search functions and other tools promote some products over others.
"We are particularly concerned about so-called hybrid marketplaces, which sell their own products in competition with third-party sellers that use their platform."
She added hybrid marketplaces, like other vertically integrated digital platforms, faced conflicts of interest and might act in ways that advantage their own products with potentially adverse effects for third-party sellers and consumers.
Other concerns, such as the collection and use of consumer data, inadequate dispute resolution processes and a need for more consumer protections, were also highlighted in the report.
The report said 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.
"We believe consumers should be given more information about, and control over, how online marketplaces collect and use their data," Ms Cass-Gottlieb said.
The report pointed out that unlike in other countries, none of the online marketplaces have reached a dominant position in Australia, but that there was potential for the market to "tip" in favour of a single dominant marketplace.
A voluntary initiative, the Product Safety Pledge, has been developed by the ACCC in collaboration with some online marketplaces which aims to protect consumers from unsafe products through several key commitments.
The ACCC said some marketplaces have joined the initiative, which provides consumers with additional protections including commitments from signatories to remove listings of unsafe products within two business days, and encourages more marketplaces to join.
In its fifth Digital Platform Services Inquiry report, the ACCC said it was considering whether Australia needed a new regulatory framework to address competition and consumer concerns with digital platform services more broadly.
In 2020–21, Amazon Australia, Catch, eBay Australia and Kogan jointly had total of $8.4 billion in sales, an increase of 21 per cent compared to 2019–20.
