Consumers should have more control over how online marketplaces such as eBay and Amazon collect and use their data, according to a new ACCC report.
Consumers using online retail marketplaces such as eBay and Amazon “have little effective choice in the amount of data they share”, according to the latest report of the Australian Competition & Consumer Commission (ACCC) Digital Platform Services Inquiry.
Consumers may benefit from personalisation and recommendations in these marketplaces based on their data, but many are in the dark about how much personal information these companies collect and share for other purposes.
ACCC chair Gina Cass-Gottlieb said:
We believe consumers should be given more information about, and control over, how online marketplaces collect and use their data.
The report reiterates the ACCC’s earlier calls for amendments to the Australian Consumer Law to address unfair data terms and practices. It also points out that the government is considering proposals for major changes to privacy law.
However, none of these proposals is likely to come into effect in the near future. In the meantime, we should also consider whether practices such as obtaining information about users from third-party data brokers are fully compliant with existing privacy law.
The ACCC examined competition and consumer issues associated with “general online retail marketplaces” as part of its five-year Digital Platform Services Inquiry.
These marketplaces facilitate transactions between third-party sellers and consumers on a common platform. They do not include retailers that don’t operate marketplaces, such as Kmart, or platforms such as Gumtree that carry classified ads but don’t allow transactions.
The ACCC report focuses on the four largest online marketplaces in Australia: Amazon Australia, Catch, eBay Australia and Kogan. In 2020–21, these four carried sales totalling $8.4 billion.
Online marketplaces such as Amazon, eBay, Catch and Kogan facilitate transactions between third-party buyers and sellers. Photo: Shutterstock
According to the report, eBay has the largest sales of these companies. Amazon Australia is the second-largest and the fastest-growing, with an 87 per cent increase in sales over the past two years.
The ACCC examined:
The ACCC expressed concern that in online marketplaces, “the extent of data collection, use and disclosure … often does not align with consumer preferences”.
The Commission pointed to surveys about Australian consumer attitudes to privacy which indicate:
However, the four online marketplaces analysed:
Some of the marketplaces also obtain extra data about individuals from third-party data brokers or advertisers.
The harms from increased tracking and profiling of consumers include decreased privacy; manipulation based on detailed profiling of traits and weaknesses; and discrimination or exclusion from opportunities.
Some might argue that consumers must not actually care that much about privacy if they keep using these companies, but the choice is not so simple.
The ACCC notes the relevant privacy terms are often spread across multiple web pages and offered on a “take it or leave it” basis.
The terms also use “bundled consents”. This means that agreeing to the company using your data to fill your order, for example, may be bundled together with agreeing for the company to use your data for its separate advertising business.
Further, as my research has shown, there is so little competition on privacy between these marketplaces that consumers can’t just find a better offer. The ACCC agrees:
While consumers in Australia can choose between a number of online marketplaces, the common approaches and practices of the major online marketplaces to data collection and use mean that consumers have little effective choice in the amount of data they share.
Consumers also seem unable to require these companies to delete their data. The situation is quite different from conventional retail interactions where a consumer can select “unsubscribe” or walk out of a store.
The ACCC has reiterated its earlier calls to amend the Australian Consumer Law to prohibit unfair practices and make unfair contract terms illegal. (At present unfair contract terms are just void, or unenforceable.)
The report also points out that the government is considering proposals for major changes to privacy law, but these changes are uncertain and may take more than a year to come into effect.
In the meantime, we should look more closely at the practices of these marketplaces under current privacy law.
For example, under the federal Privacy Act the four marketplaces
must collect personal information about an individual only from the individual unless … it is unreasonable or impracticable to do so.
However, some online marketplaces say they collect information about individual consumers’ interests and demographics from “data providers” and other third parties.
We don’t know the full detail of what’s collected, but demographic information might include our age range, income, or family details.
How is it “unreasonable or impracticable” to obtain information about our demographics and interests directly from us? Consumers could ask online marketplaces this question, and complain to the Office of the Australian Information Commissioner if there is no reasonable answer.
Katharine Kemp, Senior Lecturer, Faculty of Law & Justice, UNSW, UNSW Sydney
This article is republished from The Conversation under a Creative Commons license. Read the original article.