Shopping cart before the horse? Australia's product safety laws play catch-up with online marketplaces

We examine the ACCC’s response to CHOICE’s designated complaint and its call for stronger product safety rules, including for online marketplaces.

At the Mallesons Digital Future Summit in August, Commissioner Woodward specifically called out the risk of unsafe, prohibited or banned products getting through to Australian consumers in circumstances where online marketplaces act as intermediaries for overseas suppliers. How the ACCC will address that risk is becoming clearer:

• Just two weeks later, the ACCC released its response to the designated complaint by CHOICE, calling for legislative reforms that place product safety obligations on online marketplaces and advocating for ‘general safety protection’ for consumer goods.[1] The ACCC has said it will continue to use its existing compliance and enforcement tools, including Federal Court enforcement action, to address systemic and high-risk product safety issues in online markets.[2]
• In the days following, in a keynote address at the 2026 Law Council Australia Competition and Consumer Workshop, ACCC Chair Gina Cass-Gottlieb reiterated the view that ‘reforms are needed to close gaps in Australia's product safety framework’.[3]

For information on the ACCC’s 2026-27 product safety priorities, see here. The Mallesons Digital Future Summit is available on demand here.

Recap: the CHOICE complaint

On 3 June 2026, CHOICE lodged a designated complaint raising concerns about the sale of unsafe, banned and prohibited products to Australian consumers at scale through online marketplaces.[4] CHOICE conducted four rounds of product testing between 2024 and 2026 and found widespread safety failures across major online marketplaces.[5] Findings included children's toys failing mandatory button battery and mechanical safety standards,[6] unsafe cots,[7] and the sale of banned products such as novelty cigarette lighters and sky lanterns.[8] These examples illustrate the breadth of harms caused by unsafe products reaching consumers – from risks to children’s safety to outright prohibited goods. CHOICE argued that the existing regulatory framework has been unable to keep pace with the rapid growth of online shopping channels in Australia and such gaps have been exploited by businesses to sell harmful products.[9]

CHOICE identified two critical flaws in Australia’s product safety regime:

1. The lack of general safety protections for consumer goods. There is currently no overarching law that prevents businesses from selling, or facilitating the sale of, unsafe products in Australia; and
2. Online marketplaces are evading responsibility by acting as intermediaries. As a result, large international online marketplaces are not being held to account.[10]  

CHOICE noted that 91% of consumers believe products are legally required to be safe before sale and 89% believe it is illegal to sell unsafe products, when neither is the case under the existing product safety framework.[11] 

The ACCC’s response

On 1 September 2026, the ACCC released its response, acknowledging that the Australian Consumer Law (ACL) is not fit for purpose when it comes to online marketplace models. It was recognised that certain structural features of online marketplaces increase the risk of certain product safety harms that current enforcement tools are not equipped to address.[12]

The ACCC identified two key limitations in the current regulatory framework:

• The ACL product safety provisions apply to ‘suppliers’. Online marketplaces often list the products of many suppliers on one online storefront. The ACCC faces challenges in enforcing ACL obligations where sellers are based overseas or the online marketplace is not the direct supplier. The question of whether marketplace operators could attract the consumer guarantee obligations under the ACL has not yet been tackled by Australian courts.
• The ACL is not equipped to tackle overseas ‘suppliers’. Where sellers that meet the definition of ‘supplier’ are based overseas, the provisions are challenging to enforce.[13]

In light of these issues, the ACCC indicated it would take the following steps:

1. Engage in an online marketplace law reform process, to be led by Treasury. As part of the 2026-7 Federal Budget, the Government announced that Treasury would undertake work to strengthen the product safety framework.[14] On 3 September 2026, Chair Gina Cass-Gottlieb announced that the ACCC strongly supports the review[15] and will engage with Treasury as part of the law reform process to address the sale of unsafe goods on online marketplaces.[16] The ACCC noted that many of the issues raised in CHOICE's complaint would be best addressed through legislative reforms that ‘place clear product safety obligations on online marketplaces.’[17]
2. Advocate for a ‘general safety protection’ for consumers. The ACCC noted there are many ways such a protection could be designed and that options would be developed. This is not the first time the idea has been raised. In 2017, Consumer Affairs Australia and New Zealand (CAANZ) released a report on the state of the ACL and recommended the introduction of a general product safety provision.[18] In 2019, Rod Sims (former ACCC Chair) told the National Consumer Congress that there should be a prohibition on the sale of unsafe goods in Australia. Sims also noted then that many Australians were surprised to learn that this was not already the case.[19]
3. Continue to engage with online marketplaces via the Product Safety Pledge. The ACCC introduced the Product Safety Pledge in 2020 as a voluntary benchmark for good practice in online product safety. Signatories have made certain commitments, including in relation to increased monitoring for unsafe product listings.[20] The ACCC strengthened the pledge earlier this year, now made up of 15 commitments (up from 12) with a focus on enhanced transparency and accountability.[21] In her keynote address, Chair Cass-Gottlieb specifically referenced the strengthened pledge and its expanded membership as part of the ACCC's response to product safety risks in digital channels.[22]
4. Continue to use its existing tools to respond to product safety issues for consumers in digital markets. The ACCC noted it would continue to ‘work closely with domestic and international authorities in response to product safety issues concerning online business and marketplaces, recognising the scale and global nature of this issue.’[23]

Recent enforcement

The ACCC has continued to actively enforce product safety standards, including in relation to button battery products. Most significantly in August 2026, the Full Court of the Federal Court upheld a $14 million penalty against City Beach for selling products that failed to comply with button battery safety standards.[24] The Court granted the full amount of the penalty that the ACCC sought, over the objection of City Beach. Several proceedings and investigations relating to button batteries are currently on foot.

These enforcement actions signal the ACCC's willingness to take action in the online marketplace context even as it pursues broader legislative reform.

Key takeaways

• Online marketplaces are squarely in the regulatory spotlight. The ACCC has made clear that it views the current framework as insufficient to address the product safety risks posed by online marketplace models, and that direct obligations on marketplaces are needed.
• Legislative reform is coming. Treasury will lead a process to strengthen the product safety framework, including by placing mandatory obligations on online marketplaces and exploring options for a general safety protection. While the details are yet to be confirmed, online marketplace operators should prepare for a more onerous regulatory environment and should consider the consequences of the Product Safety Pledge becoming a set of enforceable, rather than voluntary, commitments.
• The ACCC is not waiting for reform. The recent enforcement action against City Beach reflects the ACCC's intention to use its existing tools to pursue product safety compliance. Businesses operating in this space should consider compliance when designing business processes and policies, and at each stage of customer journeys.