Kogan share price dips amid ACCC online marketplace probe

a young woman sits with her hands holding up her face as she stares unhappily at a laptop computer screen as if she is disappointed with something she is seeing there.a young woman sits with her hands holding up her face as she stares unhappily at a laptop computer screen as if she is disappointed with something she is seeing there.

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.

For context, both the All Ordinaries Index (ASX: XAO) and the S&P/ASX 200 Index (ASX: XJO) are in the green. Right now, they’ve gained 1.12% and 1.16% respectively.

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.

The post Kogan share price dips amid ACCC online marketplace probe appeared first on The Motley Fool Australia.

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More reading

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Amazon and Kogan.com ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended eBay and has recommended the following options: short April 2022 $62.50 calls on eBay. The Motley Fool Australia has positions in and has recommended Kogan.com ltd and Wesfarmers Limited. The Motley Fool Australia has recommended Amazon. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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