The ACCC is examining competition and consumer concerns with general online retail marketplaces such as eBay Australia, Amazon Australia, Kogan and Catch.com.au as part of its inquiry into digital platform services in Australia.
The ACCC is keen to receive submissions from consumers, platforms and third-party sellers, from small businesses to major brands, to inform its inquiry, and has released an issues paper today. Consumers and small business sellers are also invited to share their experiences with marketplaces by completing short online surveys.
General online retail marketplaces allow sellers to list a range of products which can be searched for, found and purchased by consumers. These marketplaces compete against each other, as well as against so-called bricks and mortar businesses, to attract both buyers and sellers.
The ACCC will examine the marketplaces and their relationships with third-party sellers and consumers, as well as how these marketplaces affect competition in Australian markets.
More Australians are turning to online shopping due to the COVID-19 pandemic and associated lockdowns. Online purchases grew by 57 per cent in 2020 year-on-year, and Australians spent a record $50.5 billion online in 2020, compared with $27.5 billion in 2018. Non-food online sales accounted for 14.2 per cent of total non-food sales in May 2021, up from 10.9 per cent in February 2020.
“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.”
The ACCC will consider pricing practices, the use of data, the terms and conditions imposed on third-party sellers, and the impacts on competition when the marketplace itself operates as a seller on the platform.
Key consumer issues to be considered include the ability of customers to leave and read reviews of sellers and products, how complaints are handled and how consumers’ data is collected and used.
The issues paper also looks at the services offered by the marketplaces, the market structures and the way the markets work.
“Online marketplaces offer many benefits to consumers who can shop around for a variety of products in one place, and for sellers which may be able to contract out services such as warehousing, packing, and shipping to the marketplaces,” Mr Sims said.
“But we would expect the marketplace to operate fairly for businesses and consumers alike and comply with consumer laws and competition laws.”
This ACCC inquiry does not cover specialist marketplaces limited to a narrow range of products.
Further information about the issues paper can be found at Digital platform services inquiry 2020-2025.
Submissions can be made to email@example.com by 19 August 2021. The final report will be provided to the Treasurer by 31 March 2022.
The ACCC’s Digital Platforms Branch is conducting a five-year inquiry into markets for the supply of digital platform services in Australia and their impacts on competition and consumers, following a direction from the Treasurer. This inquiry will report to the Treasurer every six months and will examine different forms of digital platform services, their advertising services as well as data brokers.
This issues paper will inform the ACCC’s fourth report due to be submitted to the Treasurer by 31 March 2022. The ACCC’s third report into choice screens for search services and web browsers is due to the Treasurer by 30 September 2021.
Notes to editors
eBay Australia was established in 1999. It only facilitates transactions between third-party sellers and consumers and it does not itself sell its own goods on its marketplace. In 2020, it reported gross sales of $6.5 billion. More than 12 million Australians reportedly use eBay to shop and/or sell their goods every month.
Amazon began operating its Australian marketplace in December 2017, and in 2020 it had reported gross sales of $2.6 billion.
Kogan began operations in Australia in 2006 and in March 2019 launched Kogan Marketplace which provides third-party sellers to list their goods for sale on the Kogan platform. It had gross sales of $1.1 billion in 2021.
Catch.com.au, which started operations in 2006, is part of the Wesfarmers group. Its gross sales from July to December 2020 reportedly increased by 139 per cent to $610 million, while revenue increased by 112 per cent.