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Why small businesses need more protection on major digital platforms

The NSW Small Business Commissioner has called for a code of conduct to improve dispute resolution for small businesses using digital marketplaces and other digital platforms like Amazon, eBay and Facebook. The code would ensure more timely redress for small businesses and in doing so protect their business operations and activity.

“Small businesses are more reliant on digital trading platforms than ever before and during COVID-19 these platforms have provided many small businesses with their only shopfront,” Commissioner Chris Lamont said.

“Given the increasing reliance on these platforms, it is vital that they commit to a code of conduct to address the concerns of platform users, particularly where it involves conduct that could potentially be in breach of the Australian Consumer Law.’’

His comments were made in a submission to the Australian Competition and Consumer Commission’s Digital Platforms Inquiry.

The Commissioner said some digital platforms were becoming increasingly powerful and dominant market players arguably shared similarities with regulated infrastructure like telecommunications.

The Commission has received a number of complaints from small businesses about being unexpectedly locked out of a platform or having difficulty communicating with the platform to resolve issues, including:

  • The suspension of a small business from Amazon after accidentally providing incorrect shipping numbers. This small business attempted to contact the digital platform in relation to the matter. While the business had rectified the error, they were unsuccessful in their attempt to get in contact with a representative to lift the suspension.
  • A Facebook page publishing false reviews about a small business with Facebook refusing to take action on the basis that it hadn’t breached community standards.
  • Uber drivers reporting being suddenly locked out of their account with no reason provided by the platform. These drivers may attempt to contact Uber to rectify the situation but in some situations are unable to.

“Without judging the merits of any individual suspension, the Commission is concerned that small businesses, in some cases, appear to experience difficulties having their cases reviewed,” Mr Lamont said.

The Commission envisages the code would apply to a broad range of online marketplaces, including for both goods and services. As part of the voluntary code, platforms would commit to provide mechanisms to resolve disputes, including between platform participants and with the platform itself.

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