Australia Turns Up the Pressure on Online Marketplaces Over Unsafe Products

Australia is moving towards tougher rules for online marketplaces after regulators identified significant gaps in the country’s current product-safety framework.

In September, the Australian Competition and Consumer Commission (ACCC) said existing laws do not adequately address the risks created when unsafe goods are sold through platforms where the marketplace itself may not be the direct supplier. The regulator is supporting reforms that could impose clearer and potentially mandatory safety obligations on online marketplaces.

The issue has already reached the courts. In May, the ACCC began Federal Court proceedings against Amazon Australia, alleging that children’s backpacks sold through its marketplace failed to meet mandatory warning requirements for button batteries. It was the ACCC’s first Federal Court case against an online marketplace over alleged non-compliance with mandatory product-safety standards.

Regulators have also targeted banned magnetic toys and games appearing on Amazon, eBay, Kogan and Fruugo. The ACCC issued takedown requests after finding listings for products containing small, high-powered magnets that have been prohibited in Australia since 2012 because of the risk of serious injury if swallowed.

The legal debate centres on a difficult question: when a marketplace connects an overseas seller with a consumer, how much legal responsibility should the platform carry for the safety of the product?

Australia is now considering reforms that could strengthen penalties, injury-reporting requirements and direct obligations on marketplaces.

The outcome could reshape the legal responsibilities of digital marketplaces operating in Australia.