The ACCC wants more transparency from online marketplaces – that is, they want the likes of eBay, Kogan, Catch and Amazon to tell us things like why a product is ranked higher than another and what they’re actually using our data for.
The Australian Competition and Consumer Commission (ACCC) has had tech giants in its sights for years. It ramped up action in July 2019 when it published its whopping 623-page Digital Platforms Inquiry report.
The inquiry has already seen so much action follow, including that time Facebook pulled news from Australia because legislation didn’t quite understand technology and politicians were determined to have tech giants pay “their fair share”. And today, the watchdog has published the fourth report, covering explicitly online retail marketplaces, such as Amazon Australia, Catch.com.au, eBay Australia and Kogan.
The watchdog went out to market with an issues paper last July and today’s report is a culmination of that. The report discusses issues relevant to sellers as well as customers, but given the report is a chunky 91 pages, we thought we’d focus on the buyer side of things.
The report raises a number of consumer concerns, including in relation to product display and data collection. It also identifies areas where online marketplaces should modify their practices to be more transparent and provide consumers with greater control.
While some of the concerns identified are limited to one or two online marketplaces, the ACCC said a number of concerns apply across all large online marketplaces. Let’s break it down.
Relevance of suggested products
The ACCC said it found examples where it was not clear to consumers on online marketplaces why particular products are being shown to them in prominent positions in search results or highlighted in other ways. Understandably, this is a particular concern in the case of hybrid marketplaces, where the online marketplace sells both third-party products and its own products.
“Given the reliance consumers have on the tools that help them to reduce their search costs, such as the online marketplaces’ search algorithms and the featuring of offers, the ACCC considers that online marketplaces should be more transparent about the factors that influence how prominently products are displayed,” the report states.
It said consumers need to be sufficiently well informed about how marketplace algorithms work, otherwise there is a risk that purchasing decisions will be adversely affected.
The ACCC considers it not-so-easy for consumers to make a complaint or get a solution when something goes wrong. If you’ve ever had to do this, you’d agree.
The watchdog has previously put forward some consumer protection ideas, including the introduction of an economy-wide prohibition on unfair trading practices (it said this would fill gaps in the Australian Consumer Law).
Another consumer protection tool, the ACCC says, is the introduction of a general safety provision. Essentially, businesses would be required to supply safe products to the Australian market. You’d have thought this was already law, but nope (!!!).
A ‘product safety pledge’ could make this a lot better, the ACCC highlighted.
On disputes, the ACCC said one barrier consumers face is working out who they have purchased from, and how to effectively engage with that seller to resolve their dispute. It wants there to be a more centralised kind-of dispute resolution function to be offered by these online marketplaces.
“Given their control and involvement in transactions, the ACCC considers that online marketplaces should provide a greater level of protection for consumers on their marketplace,” the ACCC wrote.
Data collection and use
We’re all acutely aware that the trade-off when handing out our data is that the services will use said data for things that aren’t always good. But we seldom complain about it when we’re served up something so specific to us (ie, when Spotify shows you a new band based on your listening habits) but we rarely read the Ts & Cs. The ACCC wants a little more transparency from these online marketplaces on what exactly our data is being collected for, and how exactly it’s being used.
The report says that many of us express strong preferences for limitations on the collection and use of our data. However, the data practices of online marketplaces often do not align with these preferences.
“The ACCC is concerned that certain data practices of online marketplaces may not align with consumer preferences, including the purposes for which consumer data is used,” the report says.
The report will be considered by government and now we just wait and see what action comes next.