Last week, the Australian Competition and Consumer Commission flagged concerns around how online marketplaces operate. In this special series, Ragtrader looks back at submissions to the Digital Platform Services Inquiry. Here, we look at Amazon.
Amazon has branded the competition between its seller partners and core private business as “vigorous and fair.”
On Thursday, The ACCC flagged concerns around how products are ranked on online marketplaces to ensure companies are not preferencing their own products.
In its submission to the ACCC’s Digital Platforms Services Inquiry last year, Amazon claimed that less than 5% of its products have a featured offer globally.
“In turn, we work hard to help seller partners reach millions of customers, develop their brand and grow their business,” Amazon submitted.
“Seller Partners benefit from the selection provided by Amazon Australia, which makes the store more attractive to customers, and both benefit from the competition between one another on the store.
“We have a strong, long-term incentive to ensure vigorous and fair competition amongst Seller Partners, as well as between Amazon Australia and Seller Partners.”
The ACCC’s key concern was around the use of algorithms on several hybrid marketplaces, which gave preference to their own products.
These ranking algorithms and other practices can impact purchasing decisions and give preferential treatment to the marketplaces’ own products, The ACCC ruled.
In its submission, Amazon Australia stated its own selection process served to benefit seller partners through fair competition aimed at customer satisfaction.
“This form of competition is vigorous and demanding but is not a zero-sum game,” Amazon said.
“When customers have great experiences, are offered great prices and decide to return to the Amazon store for future purchases, this creates opportunities for both Seller Partners and Amazon Australia.
"We have a strong, long-term incentive to ensure vigorous and fair competition amongst Seller Partners, as well as between Amazon Australia and Seller Partners.
“That intra-marketplace competition is itself an important part of the experience that the Amazon Australia store offers to customers as we compete against the myriad of other retail channels.”
Amazon also stated that while seller partners set their own prices, misleading reference prices or price gouging is not allowed.
“We may remove an offer, or in serious or repeated cases, suspend or terminate selling privileges. We do this in accordance with our Marketplace Fair Pricing Policy.”
Throughout the COVID-19 pandemic, Amazon claimed it utilised a range of methods to locate and remove unfairly priced items in high demand such as protective masks and hand sanitiser.
“If we find a price that violates our policy, we remove the offer and take swift action against bad actors engaged in demonstrated misconduct, including suspending or terminating their selling accounts.
"We have also clearly communicated with Seller Partners to ensure they understand our expectations and long-standing policies to help ensure fair pricing.
“We also don’t want to disappoint customers, so if we or our Seller Partners don’t have a good offer that we’re confident will preserve customer trust in our store, we won’t feature an offer at all.
"We would rather the customer not buy that product from Amazon than have a poor shopping experience and lose trust in Amazon Australia.”