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Small businesses\u2019 online shops are being switched off by computer algorithms with no warning or apparent human oversight, the small business ombudsman\u2019s office says, as digital platform disputes become its biggest source of complaints.<\/p>\n
These disputes have quadrupled to 48.3 per cent of all new cases managed by the Australian Small Business and Family Enterprise Ombudsman in the June quarter, up from 12 per cent a year earlier. Businesses built over a decade or more, with millions of dollars a year in sales running through their online accounts, can now be closed off in seconds by a system nobody has to explain, the agency warns.<\/p>\n
Sellers increasingly report their accounts being switched off entirely, rather than the isolated problems that once dominated: a hacked login, a withheld payment, a single listing pulled down.<\/p>\n
\u201cSmall businesses seeking our assistance describe how a \u2018community standards\u2019 algorithm has taken down their account without any apparent human oversight,\u201d the ombudsman\u2019s office told this masthead.<\/p>\n
Last month, at least five Melbourne and Sydney queer venues were locked out of Facebook and Instagram accounts they had spent more than a decade building, with the stated reasons ranging from human exploitation to a review over alleged drugs and guns. Meta later said the accounts had been flagged in error.<\/p>\n
A suspension freezes a company\u2019s account on such platforms, cutting sellers off from customer details and product photographs. The ombudsman\u2019s office has urged digital platforms to provide human contacts, specific reasons and structured appeal paths before taking such action.<\/p>\n
One of the disputes has recently been taken to the competition watchdog: US inventor Jack Nekhala has lodged a complaint with the Australian Competition and Consumer Commission (ACCC) against Amazon Commercial Services, the online giant\u2019s local arm, after his amazon.com.au seller account was deactivated on April 11, 2025.<\/p>\n
He says there had been no Australian investigation or notice, and is asking the ACCC to establish whether anyone in Australia had assessed the decision or if it automatically followed a US block.<\/p>\n
Nekhala invented the \u2018Bed Scrunchie\u2019, a sheet fastener business that turned over about $US6 million ($8.5 million) a year, almost all through Amazon. Trouble began in September 2024, when Amazon accepted two patent infringement complaints against the product. Nekhala\u2019s listing was disabled for nine days and took 19 calls to Amazon support. The fix, which he eventually found in a two-year-old Reddit post rather than from Amazon, was to formally retract a complaint he says he never lodged.<\/p>\n
Then, on October 30 that year, Amazon deactivated Nekhala\u2019s US, Canadian, Mexican and Brazilian accounts over alleged review rule breaches – the platform\u2019s guidelines for consumer feedback, testimonials and online ratings, with nine European marketplaces following days later.<\/p>\n
Weeks later, a man on LinkedIn offering Temu sales support connected Nekhala to a woman calling herself Jenna, who said she was a bedding seller with contacts inside Amazon. She was not an Amazon employee, and Nekhala says he never dealt with one directly.<\/p>\n
Over four calls, Jenna showed him internal Amazon material about his account, including enforcement classifications and investigator notes invisible to standard sellers. The records described his account block as final with an instruction not to disclose the investigation\u2019s reason to the seller. This masthead has reviewed Nekhala\u2019s complaint records, correspondence with Amazon and his submission to the ACCC.<\/p>\n
Jenna offered to have an internal contact release roughly $US90,000 in frozen funds for a 20 per cent fee. Nekhala says he refused to pay, but kept the conversation going to understand the offer.<\/p>\n
\u201cIf confidential account information can leave Amazon, or if intermediaries can sell supposed influence over suspensions, complaints, reviews, listings, or frozen funds, honest Australian sellers may be competing in a marketplace where the official rules are not the only rules,\u201d he said.<\/p>\n