The Kogan.com Ltd (ASX: KGN) share price is lower today. The negative price movement comes as the Australian Competition and Consumer Commission (ACCC) examines the practices of online marketplaces such as Kogan.
At the time of writing, shares in the online retailer are trading for $11.42 – down 1.17%. The S&P/ASX 200 Index (ASX: XJO) is currently 0.87% higher.
Let’s take a closer look at today’s news.
Kogan in ACCC crosshairs
The ACCC says it will look into the “pricing practices, the use of data, the terms and conditions imposed on third-party sellers,” of places like Kogan, as well as the Amazon.com, Inc (NASDAQ: AMZN) and eBay Inc (NASDAQ: EBAY) Australian branches.
It will also look into consumer-focused issues, such as the ability of consumers to leave reviews, the complaints handling process, and the usage and storage of data.
Investors may not be keen on the oversight Kogan is facing, and it reflects in the Kogan share price.
“These online marketplaces are an important and growing segment of the economy, so it is important that we understand how online marketplaces operate and whether they are working effectively for consumers and businesses,” ACCC Chair Rod Sims said.
“But we would expect the marketplace to operate fairly for businesses and consumers alike and comply with consumer laws and competition laws.”
In March 2019, Kogan launched ‘Kogan Marketplace’. It’s a platform for third-party sellers to list their goods on sale at Kogan. It had gross sales of $1.1 billion in 2021.
Online shopping saw a huge surge in demand as COVID forced people to stay home. Online purchases grew by 57% in 2020 year-on-year, and Australians spent a record $50.5 billion online in 2020. Non-food online sales accounted for 14.2 per cent of total non-food sales in May 2021, up from 10.9 per cent in February 2020.
Kogan has previously been in trouble with the ACCC. The government agency took Kogan to court, alleging it had mislead consumers about a discount promotion. The company was ordered to pay a fine of $350,000 for the affair.
Motley Fool Australia reached out to Kogan for comment, but none was received before publication.
Kogan share price snapshot
Over the past 12 months, the Kogan share price has fallen about 35%. That equates to a 55-point difference between the company and the ASX 200 – and not in Kogan’s favour.
Since the beginning of the year, however, the Kogan share price has increased by roughly 10%.
Kogan.com has a market capitalisation of $1.2 billion.