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ACCC says consumers need more choice over what online marketplaces do with their data
Aug
According to the report, consumers using online retail platforms such as eBay and Amazon “have little choice in how much data they share.” latest report as part of an investigation into digital platform services conducted by the Australian Competition and Consumer Commission (ACCC).
Consumers may benefit from the personalization and recommendations these stores offer based on their data, but many have no idea how much personal data these companies collect and share for other purposes.
ACCC Chair Gina Cass-Gottlieb he said:
We believe that consumers should have access to more information and control over how online marketplaces collect and apply their data.
The report echoes previous calls by the ACCC for changes to Australian Consumer Law to address unfair terms and data practices. It also indicates the government is considering proposals for significant changes to privacy law.
However, neither of these proposals is likely to become law in the near future. In the meantime, we should also consider whether practices such as obtaining user information from third-party data brokers are fully compliant with applicable privacy law.
Why is the ACCC investigating online trading platforms?
The ACCC investigated competition and consumer issues relating to the ‘general online retail markets’ as part of its five-year digital platform services inquiry.
These marketplaces facilitate transactions between third-party sellers and consumers on a shared platform. They do not include retailers that do not operate marketplaces, such as Kmart, or platforms such as Gumtree, which host classified ads but do not 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 marketplaces had combined sales of $8.4 billion.
Snapshot
According to the report, eBay has the largest sales of these companies. Amazon Australia is the second largest and fastest growing company, with sales increasing by 87% in the last two years.
The ACCC investigated:
- the state of competition in the relevant markets
- the problems faced by sellers who are dependent on selling their products through these marketplaces
- consumer issues, including concerns about the collection, apply and sharing of personal data.
Consumers do not want their data to be used for other purposes
The ACCC has expressed concern that in online markets “the extent of data collection, apply and disclosure … is often not aligned with consumer preferences”.
The Commission referred to studies on Australian Consumers’ Attitudes Towards Privacy which indicate:
- 94% of respondents did not feel comfortable with how digital platforms, including online stores, collect their personal data
- 92% agreed that companies should only collect information necessary to deliver their product or service
- 60% considered that monitoring their online behaviour in terms of targeted advertisements and offers is completely or rather unacceptable.
Read more: How one basic policy change can stop online retailers from spying on you
However, the four online markets analyzed:
- do not proactively present privacy terms to consumers “throughout the purchasing process”
- may allow advertisers or other third parties to place tracking cookies on users’ devices
- do not clearly indicate how consumers can opt out of cookies while still using the store.
Some marketplaces also obtain additional user data from third-party data brokers and advertisers.
This damage resulting from increased tracking and profiling among consumers include restriction of privacy, manipulation based on detailed profiling of characteristics and vulnerabilities, and discrimination or exclusion from opportunities.
Confined selection: you can’t just “walk out of the store”
Some might argue that consumers do not need to care as much about their privacy if they continue to apply these companies, but the choice is not that basic.
The ACCC notes that relevant privacy provisions are often scattered across multiple websites and offered on an “accept or decline” basis.
These terms also apply “bundled consents.” This means that consent to a company using your data to fulfill an order, for example, may be combined with consent to a company using your data for its separate advertising activities.
Moreover, as my research has shown, there is so little competition in terms of privacy between these markets that consumers simply cannot find a better deal. The ACCC agrees:
Although Australian consumers can choose between a number of online marketplaces, the common approach and practices of the major online marketplaces to data collection and apply means that consumers have little choice over how much data they share.
Consumers also can’t demand that these companies delete their data. The situation is completely different from conventional retail interactions, where a consumer can choose to “opt out” or leave the store.
Do our privacy laws currently permit all of these practices?
The ACCC has renewed its earlier calls for the Australian Consumer Law to be amended to prohibit unfair practices and make unfair contract terms illegal. (Currently, unfair contract terms are simply void or unenforceable.)
The report also said the government was considering proposals for major changes to privacy law, but that these changes were uncertain and could take more than a year to come into force.
Read more: Modern proposed privacy code promises tough rules and $10 million in fines for tech giants
In the meantime, we should take a closer look at the practices in these markets in airy of applicable privacy laws.
For example, under federal privacy act four markets
you should collect personal information about an individual only from that individual, unless… it is unreasonable or impractical to do so.
However, some online markets claim to collect information about the interests and demographics of individual consumers from “data providers” And other third parties.
We don’t know all the details of the data we collect, but demographic information may include our age range, income, or family details.
How is it “unreasonable or impractical” to obtain information about our demographics and interests directly from us? Consumers could ask this question to online marketplaces and file a complaint with Office of the Australian Information Commissioner if there is no reasonable answer.
