Dodgy online items in consumer watchdog’s crosshairs
Subscription traps and dodgy products purchased from marketplaces such as Shein and Temu are at the center of a new digital focus on consumer protection.
The consumer watchdog will announce its priorities for the next financial year on Thursday and online retailers will face increased scrutiny.
The regulator is broadening its focus on digital markets after a year of intense scrutiny on supermarket giants, including an ongoing case against Coles for misleading pricing.
The head of the Australian Competition and Consumer Commission says businesses and consumers are constantly bombarded with opaque marketing and junk online.
“We are very concerned to see the proliferation of unsafe products in online markets,” said Gina Cass-Gottlieb.
Forcing market giants to sign up to product safety commitments is one of the reforms being put forward.
Only AliExpress, Amazon and eBay have signed up to the ACCC’s voluntary commitment to cooperate on product safety.
The ACCC said breaches of this rule and the lack of oversight over China-based Temu and Shein had damaged trust among buyers.
Of particular concern is the fact that unsafe baby products, including sleeping supplies and devices containing button batteries, are being sold on giant online marketplaces.
“We do not feel that we have access to sufficient data to properly address product safety concerns,” Ms. Cass-Gottlieb said.
Elsewhere in the digital space, the watchful eye is on influencers who fail to properly disclose sponsored content.
Consumer bugs will also be scrutinized, including streaming services, gyms and phone providers that set subscription traps and then make it harder to cancel deals.
The ACCC recognizes a global atmosphere of declining trust in governments and regulators.
“We try to be as open, relevant (and) accessible as possible about what we do and why we do it,” Ms. Cass-Gottlieb said.
“We’re not asking more from businesses than we ask ourselves; they need to be accountable for meeting standards.”
Fighting the scams has been troublesome, as Meta frustrated the regulator with four-year delays and dismissal applications in a landmark case.
Meta was sued by the ACCC in March 2022 for failing to eliminate scams on its platforms, including Facebook and Instagram.
But the watchdog has received several high-profile penalties in recent months.
Health insurance giant Bupa was ordered to pay $35 million in December for misleading customers about benefits.
In September, embattled telco Optus was forced to pay a $100 million fine for targeting vulnerable customers with phone plans they could not afford.
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