The Absence of Competition in the Privacy Terms of Online Marketplaces

17 Pages Posted: 17 Aug 2021 Last revised: 24 Aug 2021

See all articles by Katharine Kemp

Katharine Kemp

University of New South Wales (UNSW) - Faculty of Law

Date Written: August 16, 2021

Abstract

This submission in response to the ACCC General Online Retail Marketplaces Issues Paper provides an analysis of the privacy terms offered by four key general online retail marketplaces in Australia (incl Amazon and eBay), to offer some assessment of both:

• the quality of privacy terms offered to website users via those notices; and

• the extent of competition between firms with respect to the privacy terms offered to website users.

This analysis, together with existing research on consumer data practices, gives rise to the following key recommendations and conclusions:

• At a minimum, it should be unlawful for online retailers and marketplaces to collect data relating to an individual consumer from a third party, unless the consumer has requested the online retailer or marketplace to do this by taking clear and unequivocal action with respect to specified third parties. There should be an exception if the collection and use are only for strictly necessary purposes, such as detection of unlawful activity, address verification and credit checks, where credit is sought.

• There is negligible competition between the major online marketplaces operating in Australia in respect of the privacy terms offered to website users and marketplace customers, as illustrated by the tables in this submission.

• In particular, the privacy terms of all major online marketplaces in Australia:
o include numerous vague, open-ended and confusing terms that limit consumers’ information and decision-making.

o offer no real and substantial choices about excess data collection and data uses (that is, collection and uses beyond those necessary to facilitate browsing and purchasing via an online marketplace).

o universally require consumers to “consent” to the online marketplace obtaining further data about the consumer from third parties, often including data brokers and/or advertising companies, as a condition of using the website or marketplace. This is not necessary for the operation of the website or marketplace.

o promise consumers they can opt out of seeing or receiving targeted ads or marketing, without highlighting the fact that this will not prevent the marketplace from continuing to collect and use excess data about the consumer. A warning about this should be highlighted.

o require consumers to engage in the Sisyphean task of adjusting privacy settings and rejecting and/or deleting cookies and similar technologies, in a likely fruitless attempt to avoid tracking by these means. There should be a “no-cookie”/”no-tracking” default setting.

Those major online marketplaces operating in both the European Union and Australia expressly offer more privacy-protective terms and defaults to EU users than Australian users, which can be taken to be a consequence of stronger privacy regulation in the EU.

The three recommendations in this submission – the third-party data collection rule; the no-cookie /no-tracking default; and the warning on personalised advertising opt-outs – are modest, simple and achievable steps towards greater transparency and choice, while major changes to our privacy laws are still being considered.

The analysis does not attempt to report on the actual data practices of these marketplaces, but is based on a good-faith interpretation of the published privacy terms.

Keywords: data privacy; privacy law; antitrust; competition law; digital platforms; Amazon; eBay; consent; privacy policies; privacy notices

Suggested Citation

Kemp, Katharine, The Absence of Competition in the Privacy Terms of Online Marketplaces (August 16, 2021). Available at SSRN: https://ssrn.com/abstract=3905693 or http://dx.doi.org/10.2139/ssrn.3905693

Katharine Kemp (Contact Author)

University of New South Wales (UNSW) - Faculty of Law ( email )

Kensington, New South Wales 2052
Australia

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