Trade Me and animal rights groups are tightening regulations governing the sale of puppies online in response a campaign against the practice known as puppy milling.
A puppy mill is a factory farm where dogs are bred for commercial purposes and are often kept in substandard conditions.
The current Animal Welfare Act stipulates that animals must have food, water and shelter, but does not specify how often dogs can be bred or the impact frequent breeding has on them.
Paw Justice has launched a campaign called Don't Trademe aimed at stopping puppy milling and unregulated back-yard breeders.
It said Trade Me enabled puppy mills to thrive in New Zealand because of the lack of regulation.
Co-founder Craig Dunn said the practice was not illegal but Trade Me should take the moral high ground and change the way puppies were sold on its website.
"It comes down to a moral issue. And I think for Trade Me to go look, you know, there is a public outcry about this, that they need to take some responsibility as well and be the leaders behind this - why wait for the law?"
SPCA chief executive Ric Odom said there should be a partnership between sellers and Trade Me to reduce puppy milling.
Mr Odom said the auction website should expect sellers to prove that the animal is chipped and to provide a history of how often it is breeding.
"They can check on this, and they can say well look is the animal microchipped, is it of a suitable age to sell, are we seeing patterns where we've got the same animal that's producing the same, multiple litters over several years. In which case, that's an animal welfare issue potentially."
Mr Odom said the SPCA had proposed changes to the Animal Welfare Bill that would give more grounds for prosecuting breeders.