Kogan, eBay, Amazon and Catch Under Investigation from ACCC

Investigations such as these have been conducted in the US, Germany and across the EU, where regulators have undertaken investigations of Amazon to examine how it uses its market power and its effect on third-party sellers and consumers.

This enquiry will examine the online marketplaces and their relationship with third-party sellers and consumers. Furthermore, the ACCC will explore how these online marketplaces affect competition in Australian markets. This investigation will not cover marketplaces that offer a narrow range of products.

The Australian online retail market has boomed in the last 18 months, with online purchases increasing by 57 percent in 2020 YoY. Last year, Aussie consumers spent a whopping $50.5 billion online, compared to the $27.5 billion in 2018.

Amazon has been the subject of similar investigations in the US and the EU | via Unsplash

While no particular online marketplace currently has the leading pull compared to the likes of Amazon in other countries, the ACCC will conduct this investigation as e-commerce skyrockets in popularity with Australian consumers. Online marketplaces such as Catch and Kogan have played a large and dominating role in these figures, and continues to grow, as Rod Sims, ACCC Chair, explained.

“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,” he said. “We want to be sure that the rules that apply to traditional retail are also complied within the online context. We are keen to hear about the experiences of Australians, both consumers and businesses.”

The investigation will examine online marketplace pricing procedures and practices, the use of data, and terms and conditions imposed on third-party sellers. It will also investigate the impact of competition in similar markets, and the impacts on said competition when a marketplace itself operates as a seller on the platform.

“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,” explained Sims. “But we would expect the marketplace to operate fairly for businesses and consumers alike and comply with consumer laws and competition laws.”

Further investigation will include consumer issues such as the ability to leave and read reviews of sellers and products. The ACCC will also conduct research into the process of complaints, how they are handled and how consumer data is collected and used.

The ACCC will submit a report to the Treasurer by March 31 2022, following its investigation of general online marketplaces in Australia.

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