Digital platform providers need to do better for small business: ASBFEO

| April 27, 2023

Australian Small Business and Family Enterprise Ombudsman, Bruce Billson, has called on digital platform providers to dramatically improve their dispute resolution processes for small business.

Mr Billson said there has been a noticeable increase in complaints and disputes involving digital platform providers, and since July 2020 the Ombudsman has taken on more 236 cases involving small and family businesses.

“When we become involved it regularly leads to satisfactory outcomes in just a handful of days – which means small businesses can get back in business,” Mr Billson said.

“We’re arguing for a policy change and for dispute resolution agency support like what we provide, to equip small and family businesses with the tools to protect themselves.

“When small businesses turn to us for assistance, our contact with the digital platforms is generally constructive and most have provided us with a direct human contact to enable these disputes to be escalated and a satisfactory outcome achieved quickly.

“However, the need for a government body to step in to resolve every small business dispute is not the answer and should be the exception.

The Ombudsman has outlined the problems and solutions in a submission to the Senate inquiry into international digital platforms.

“These platforms, which have fundamentally changed the way in which small businesses connect and sell to their customers, must make their self-help and internal problem solving more effective,” Mr Billson said.

“Some people have built their entire businesses on social media and digital platforms and having someone else access and control their account is devastating for their business and their reputation.

“They watch the financial and emotional damage occur in real time with no ability to stop it.

“There have been too many examples of small business owners being locked out of their account, typically after being hacked, and it can be a nightmare trying to contact a real person to resolve their problem.

“This typically means a business loses access to their advertising, communication with customers, ability to provide posts about their services, intellectual property and key contacts for their business. It can also see charges accrue on accounts where advertising or credit cards are linked.

“One of the absurdities of the current situation is after being locked out of your account, you need to access your account to make a complaint. It’s the ultimate run-around.

“Often there is no real person you can speak to, and the automated systems prevent you being able to escalate the issue. This is just not acceptable.

“It is crucial that platforms implement clear, appropriate and standardised internal procedures to enable a timely resolution for small business disputes. Doing this and providing clear escalation points and dedicated contacts for dispute resolution agencies would mean small businesses can have their dispute handled efficiently and resume operating their businesses sooner.”

Mr Billson also said more needed to be done to combat scams and fake reviews and he called for the implementation of the ACCC’s recommendation of a mandatory ‘notice-and-action’ mechanism. This would allow anyone to notify digital platforms of potential illegal content on their service and require them to take action.

“Small businesses are especially vulnerable to fake review campaigns and fraudulent misrepresentation, as they lack the expertise and resources to prevent and combat scams,” he said.

“We’ve heard about cases of small businesses being held to ransom over fake reviews, with scammers only removing them once they receive payment.

“Most disturbingly, there are commercial service providers that help new players break into a market by generating hostile contrived reviews for existing providers.

“They offer the service of trash talking a competitor for a fee with fake reviews to drive down ratings to lay the groundwork for a new competitor to come into a market.

“That kind of behaviour is just downright shabby and not cool. And for a legitimate business, the options currently available to deal with that aren’t that great.”

Mr Billson said existing laws are not well suited to dealing with this.

“Fake reviews and fraudulent misrepresentation of a business may remain visible while investigations take place and small business owners are left helpless as they watch this damage their business.

“This can impact not only business viability but the mental health of the small business operator and their employees.”

Mr Billson also called for the creation of a ‘super-complaints’ mechanism to allow the ASBFEO and other credible dispute resolution agencies to refer cases directly to the ACCC for guaranteed investigation and, where necessary, enforcement.

Mr Billson urged small businesses to act now to minimise risk and protect their digital accounts by turning on multi-factor authentication, using secure strong passwords/passphrases and login alerts.

He also encouraged people to keep copies of their account details and URLs in a safe place so if they are hacked, they can provide the information.