The Australian antitrust regulator on Thursday began a probe into the local units of Amazon, eBay, and other online markets to ensure fairness in the e-commerce sector which has experienced staggering growth in the wake of the coronavirus pandemic.
The Australian Competition and Consumer Commission (ACCC), previously probed tech-giants Facebook and Google, a move, which according to the commission, was to put the rapidly growing market powers of the companies in check. The Australian regulator said it carried an investigation and the results of which showed that Facebook and Google possessed too much market power in the media industry, a situation it said posed a potential threat to a well-functioning democracy.
Australia’s antitrust watchdog is now shifting its attention from Facebook and Google to online marketplaces Amazon, eBay, Kogan, and Catch, in a probe that may result in changes in consumer laws, according to the Australian Competition and Consumer Commission Head Rod Sims.
In a statement, he said that 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 added that the market power and dominance wielded by online marketplaces globally, in particular Amazon, has raised concerns about whether the platforms use their dominance and data to squeeze sellers and consumers; an issue which the Australian Competition and Consumer Commission is set to examine. The commission is set on ensuring that online marketplaces comply with the rules that apply to traditional retail companies.
Rod Sims also said that the dominance of online marketplaces had lead to problems in overseas jurisdictions and that these problems were starting to emerge in Australia.
The Australian regulator said it would examine the relationships between large online markets and third-party sellers and shoppers, including competition impacts and handling of data, complaints, and reviews. The commission said it had received wide-ranging complaints “including the “quality of goods sold on marketplaces, the timeliness of payment remittance to sellers, how goods are put on display on marketplaces, and the level of support provided by marketplaces to consumers when disputes arise”.
The ACCC said that online marketplaces were growing rapidly and becoming more powerful and dominant, with Australia’s biggest retail sites being used by more than 12 million people monthly to shop and sell goods.
Amazon was launched in Australia in 2017, and while the company has not reached the market dominance as that experienced in the United States and other countries, its sales in Australia doubled in 2020. Overall, despite bouts of lockdowns, Australian online purchases in 2020 increased by 57% and reached $50.5 billion.
In reaction to the development, an Amazon spokesperson said the company looked “forward to engaging with the ACCC on these important topics in the coming months.”