ACCC Won’t Protect Retailers From Amazon, Warns Of Anti-Competitive Behaviour

The ACCC has warned retailers and suppliers to remain compliant with local competition laws as they work to combat Amazon’s impact – adding it won’t protect “uncompetitive” companies against competition from the e-commerce giant, even if it means some firms will fail.

ACCC Chairman, Rod Sims, has revealed that the regulator will not only be keeping a close eye on Amazon Australia but also local retailers, wholesalers and suppliers who may engage in anti-competitive behaviour – e.g. exclusivity agreements and resale price maintenance.

Some local distributors admit they had considered preventing Amazon Marketplace sellers from undercutting prices, in addition to others who considered prohibiting retail customers from selling items on Amazon’s website.

Sims reminds Australian organisations that exclusivity arrangements are prohibited should they significantly reduce competition. Companies must be aware they also do not engage in illegal retail price maintenance.

Mr Sims admits that the ACCC has received a “flood of complaints”, however, affirms that the watchdog must ensure “both they and others don’t break the law”.

Concerning Amazon Australia, the consumer watchdog affirms it will be scrutinising the e-commerce giant to ensure it doesn’t mislead customers by not providing guarantee rights for defective products.

Sims also states that ACCC is keeping a close on Amazon Australia to ensure there are no unfair contract terms with suppliers:

“If there are a lot of sellers in the market and you’re just one it’s unlikely you’ll be doing something that breaches the Act, but if you’re a big player in a market you have to be careful what you do”

“Likewise we’ll be watching what other companies do in relation to anti-competitive activity”.

In contrast to the United States, resale price maintenance is illegal in Australia. Consequently, some consumers electronics brands have refused to supply local online retailers, forcing them to consider parallel import avenues.

Following his speech in Sydney on Thursday, Mr Sims affirms that the ACCC will not protect local companies from competition against new entrants, such as Amazon, even if it means some companies will fail:

“Protecting the competitive process is about ensuring winners and losers are determined by the quality of the offers firms make to consumers, so firms that offer consumers a better deal should be rewarded irrespective of their size. To some this may seem unfair. But it is this process that drives innovation, better business practices and lower prices for all Australians”

“What has been fascinating recently is that some of the loudest opponents of the recent s46 changes have suggested that the arrival of Amazon, a new entrant to the Australian market, could be anti-competitive. To me this shows how much of the recent debate about s46 was misplaced,” Mr Sims said.

“Amazon’s entry into Australia will be good for consumers, despite it not being good for some incumbent retailers. Some of these incumbents have even called for ACCC intervention to act against Amazon’s business model.”