The Kogan.com Ltd (ASX: KGN) share price is in the red on Thursday amid a probe into online retail marketplaces.
The Australian Competition and Consumer Commission (ACCC) has highlighted concerns about competition and privacy across Australia’s major marketplace platforms.
The competition watchdog’s review focused on Australia’s 4 largest online marketplaces: Kogan, Amazon Australia, Catch, and Ebay Australia.
In light of its findings, the ACCC is considering introducing more regulatory framework regarding digital platform services.
At the time of writing, the Kogan share price is $4.53, 2.58% lower than its previous close.
Let’s take a closer look at what has concerned ACCC.
Kogan slumps as ACCC ponders new regulation
The Kogan share price is slumping amid concerns of marketplaces’ use of algorithms, consumer data, and dispute processes.
After concluding its probe, the ACCC believes the industry needs more consumer protections. Particularly, surrounding platforms’ control and involvement with transactions.
“Online marketplaces have an important role in connecting Australian consumers and sellers, and make up a growing share of consumer sales,” said ACCC chair Gina Cass-Gottlieb. “But we are concerned about their impact on both consumers and third-party sellers who rely on online marketplaces to reach their customers.”
The watchdog is also concerned over the use of ranking algorithms, which impact consumers’ purchasing decisions.
How much data platforms collect from consumers, as well as what that data is used for, also sparked worries.
Finally, a continued lack of dispute resolution processes has pushed the regulator to once again recommend the establishment of an ombudsman scheme to resolve complaints.
Following the probe, the ACCC is calling for platforms to offer consumers and sellers more information and control over how ranking algorithms work and what marketplaces are doing with their data.
The competition watchdog is also considering if Australia would benefit from new regulatory framework addressing competition and consumer concerns with digital platform services more broadly.
“Any such framework should be able to be applied to an online marketplace if it reaches a position where it could exercise a certain level of market power or, potentially, act as a gatekeeper between businesses and consumers,” said Cass-Gottlieb.
Kogan share price snapshot
This year has been rough on the Kogan share price.
It has tumbled 49% since the start of 2022. It is also nearly 58% lower than it was this time last year.
Source: Read More