Australian online marketplace under scrutiny of the ACCC
Australia’s ecommerce market is to be investigated by watchdog Australian Competition & Consumer Commission to check whether they fairly go about their operations and comply with competition laws.
Leading online retailers in the appliance and electronics market – Amazon, Kogan, eBay and Catch – will be probed by the watchdog. The Australian Competition and Consumer Commission said that it will be exploring how online retail marketplaces affect competition in Australia.
They added that the international marketplaces will also come under the investigation and will be subject to close scrutiny.
In the past, Australian online marketplace Kogan has already been fined multiple times by the ACCC for its questionable trading practices.
More on the ACCC inquiring online retail players
For providing assistance in the inquiry, the Australian watchdog has called for submissions from the retail industry and consumers that come under the umbrella of the ACCC’s wider ongoing investigation of digital platform services.
The inquiry of online retail marketplace is all set to closely examine marketplaces as well as their relationships with 3rd party sellers and customers and how these marketplaces impact competition.
The Aussie watchdog said it will be considering the pricing practices and their data usage. Moreover, it will be considering the third-party conditions for sellers and the impact on competition when the online retail marketplace itself operates as a seller on [its own] platform.
It will also dig deeper into the customer’s ability to leave reviews and will also examine the online retailers’ complaints handling procedures.
The Australian Competition & Consumer Commission will submit its final report to the Treasurer by March 2022 after its thorough examination of general online retail marketplaces.
Why is the ACCC probing online ecommerce marketplaces?
An issues paper states that while general online retail marketplaces offer benefits to sellers as well as consumers, issues and concerns have been raised to the watchdog about the conduct of a few online marketplaces that risk harm to both consumers and sellers and consumers.
Concerns informed are related to the display of seller goods, timely payments for sellers as well as for consumers, support level provided by marketplaces at the time of disputes arise and goods quality issues.
The ACCC said that it is well aware of possible risks in the future from these online marketplaces given the ability to perform a gatekeeper role which will enable them to exercise a degree of market power and put upwards pressure on prices (potentially).
With the pandemic pushing people to buy things online through these marketplaces, online shopping has grown by a whopping 57% year-on-year in 2020. Moreover, consumers have spent a record $50.5 billion online in 2020.
With the numbers going as high as the sky, government intervention is important to keep an eye on the ecommerce companies so that no seller or buyer is harmed in any way.
This is the 4th report that will be submitted to the Treasurer with regard to digital platform services inquiry. The 3rd and latest report submitted to the Treasurer dealt with choice screens for search services as well as web browsers.
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