Are You Concerned By Marketplace Algorithms & Data Use?

Liz Morton
Liz Morton


The Australian Competition and Consumer Commission has raised concerns about how algorithms and data collection/use impact users of online retail marketplaces like Amazon Australia, Catch, eBay Australia and Kogan.

Concerning issues for consumers and sellers on online marketplaces
An ACCC report examining general online retail marketplaces, such as Amazon Australia, Catch, eBay Australia and Kogan, has highlighted a range of concerns about how they operate as well as the significant benefits they provide to consumers and sellers. Online marketplaces provide a low-cost way for…

Concerns include the use of algorithms to decide how products are ranked and displayed...the collection and use of consumer data, inadequate dispute resolution processes and a need for more consumer protections...

...“Online marketplaces have an important role in connecting Australian consumers and sellers, and make up a growing share of consumer sales. But we are concerned about their impact on both consumers and third-party sellers who rely on online marketplaces to reach their customers,” ACCC Chair Gina Cass-Gottlieb said.

According to the report, consumers and sellers are most concerned with how marketplaces display and rank products on the platform, particularly in hybrid-marketplaces which sell their own products as well as featuring those of third parties.

“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,” Ms Cass-Gottlieb said.

“We are particularly concerned about so-called hybrid marketplaces, which sell their own products in competition with third-party sellers that use their platform...

...Marketplaces have deployed ranking algorithms and other practices which have a significant impact on the purchasing decisions of consumers. These algorithms and practices can be used to provide preferential treatment to the hybrid marketplaces’ own products.

There were also concerns about how personal data is collected and used, consumer protection and dispute resolution practices.

“We believe consumers should be given more information about, and control over, how online marketplaces collect and use their data,” Ms Cass-Gottlieb said.

“Given the important intermediary role performed by online marketplaces between consumers and sellers, it is also important that marketplaces have protections in place for consumers using their services.”...

...“We continue to support a minimum internal dispute resolution requirement for digital platforms...

“Other measures supported by the ACCC, including a prohibition on certain unfair trading practices, introducing a general safety provision, and making unfair contract terms illegal, could help address other issues identified in this report.”

Governments across the globe are grappling with similar questions as well as fraud, counterfeit and stolen goods, and consumer safety and protections concerns, with many considering possible regulatory and legislative solutions to these issues.

In the UK, comedian and consumer rights TV show presenter Joe Lycett recently advocated in the House of Lords for more accountability for social media and sales platforms to stop scams.

Joe Lycett: sites such as Airbnb and eBay must do more to stop scams
TV presenter tells peers such platforms often pocket revenue but refuse to take responsibility for fraud

...regulation, including the introduction of more rigorous checks, should pressure lucrative social media and sales platforms into helping customers who regularly lose thousands of pounds in transactions with fake sellers.

Speaking to the House of Lords digital fraud committee, he said: “I think the biggest sector that we think could do better are the platforms.

“These platforms are often making a lot of money … they should be obliged to do more in that area.”

And here in the US, several states have already passed or are considering legislation targeting fraud and stolen goods sold on online platforms.

Several states consider legislation targeting fake online sales
Retail theft has spiked during the pandemic, and as states wait for federal action, a growing number are taking matters into their own hands when it comes to online marketplaces.

What are your concerns with marketplace algorithms, data collection, dispute resolution and consumer protection and safety?

Do you think these platforms do enough to address concerns of both buyers and sellers on these issues?

Let us know in the comments below!


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Liz Morton is a seasoned ecommerce pro with 17 years of online marketplace sales experience, providing commentary, analysis & news about eBay, Etsy, Amazon, Shopify & more at Value Added Resource!