Digital platform disputes are now the single biggest complaint category at the Australian Small Business and Family Enterprise Ombudsman, with such cases quadrupling to 48.3 per cent of all new cases in the June quarter, up from 12 per cent a year earlier, according to an SMH investigation.

The ombudsman’s office says businesses built over a decade, with millions of dollars flowing through their accounts, can be switched off in seconds by an automated system that gives no explanation. Sellers report losing not just their storefronts but access to customer records and product photos the moment an account goes down.

One case has landed at the ACCC. US inventor Jack Nekhala lodged a complaint against Amazon’s Australian arm after his amazon.com.au seller account was deactivated on 11 April 2025 with no Australian investigation or notice. His product, the Bed Scrunchie sheet fastener, turned over roughly $US6 million ($8.5 million) a year, almost entirely through Amazon. He says a pattern of automated enforcement actions across more than a dozen global marketplaces preceded the final shutdown, including a US account block over alleged review rule breaches in October 2024 that cascaded through Canada, Mexico, Brazil, and nine European markets within days. Amazon confirmed the account was permanently suspended for policy violations but disputed Nekhala’s account of the reasons.

The case took a stranger turn when a LinkedIn contact connected Nekhala to a third party who claimed inside access to Amazon’s enforcement systems and offered to release roughly $US90,000 in frozen funds for a 20 per cent fee. Nekhala says he declined to pay. Amazon later confirmed to Bloomberg that an employee who leaked his account information had been sacked, though for unrelated misconduct.

University of Melbourne law professor Jeannie Paterson told the SMH that immediate account deactivation without disclosed reasons could be considered unfair under the Australian Consumer Law, noting that a service provider generally needs sound reasons to terminate and, ideally, stated criteria for when it will do so. University of Sydney academic Rob Nicholls added that the ACCC’s interest would likely turn on whether the problem affects a number of Australian small businesses, not just one. The ACCC told the SMH it doesn’t comment on individual complaints but said Australian Consumer Law obligations apply to every business trading here, local or overseas.

For tradies and sole traders who rely on online platforms to quote work, sell products, or collect payment, the ombudsman’s message is worth heeding: diversify where you trade, keep copies of your customer data off-platform, and don’t let any single account become your whole business. The ACCC has been pushing for mandatory minimum standards for platform dispute resolution and an independent external body to handle complaints. Neither exists yet.

Frequently asked questions

What can I do if an online platform suspends my business account without warning?

The Australian Small Business and Family Enterprise Ombudsman can take up platform disputes on your behalf. You can also lodge a complaint with the ACCC, which says Australian Consumer Law obligations apply to all platforms trading in Australia, regardless of where they’re based.

Is there an independent body that handles platform complaints in Australia?

Not yet. The ACCC has been pushing for mandatory minimum standards for platform dispute resolution and an independent external complaints body, but neither exists at the time of publication.

How can I protect my business from a platform shutdown?

The ombudsman’s advice is to diversify where you trade, keep copies of your customer data off-platform, and avoid letting any single account become your entire business.

Sourced from Sydney Morning Herald, ACCC, University of Melbourne, University of Sydney. Original article.