ACCC worries how online marketplaces use algorithms and data

In releasing its fourth report as part of the inquiry, the ACCC acknowledged that while there is a small number of relevant products on an online marketplace that can help consumers make purchasing decisions, it also found examples where online marketplaces used algorithms to decide how products are ranked and displayed, including self-preferencing their own products.

The institution insisted that online marketplaces need to be more transparent with consumers and sellers about how they operate. For example, they should explain to consumers and sellers why their search functions and other tools promote some products over others.

Officials added that hybrid marketplaces, like other vertically-integrated digital platforms, face conflicts of interest and may act in ways that advantage their own products with potentially adverse effects for third-party sellers and consumers.

Another concern the ACCC made note of was around data collection and the use of consumer data, believing that more consumer protections are necessary, such as agreeing to the voluntary Product Safety Pledge, which commits signatories to removing listings of products deemed unsafe within two business days.

The report also raised worries about the lack of dispute resolution mechanisms available to sellers and consumers. The ACCC reinforced the need for online marketplaces to introduce minimum internal dispute resolution requirements and an ombudsman scheme to resolve complaints and disputes. This was a recommendation the ACCC put forward as part of the Digital Platforms Inquiry Final Report.