ACCC warns against anti-competitive behaviour as Amazon looms
Sue Mitchell
November 29, 2017
AFR
Australian Competition and Consumer Commission chairman Rod Sims has warned suppliers and retailers to be careful they don’t breach competition laws as they attempt to limit the impact of Amazon’s expansion.
Mr Sims said the commission would not only be scrutinising Amazon’s conduct but would keep a close eye on suppliers, wholesalers and retailers who engaged in anti-competitive conduct such as resale price maintenance and exclusivity arrangements.
As Amazon prepares to start selling a new range of products on its Australian site, some distributors have told The Australian Financial Review they are considering trying to restricting their customers from selling products on Amazon and also may seek to prevent Amazon marketplace sellers from undercutting prices.
“We do have concerns and it’s something we will be watching very closely,” Mr Sims told the Financial Review on Wednesday.
He said companies had to be very careful not to engage in illegal retail price maintenance while exclusivity arrangements are prohibited if they substantially lessen competition.
The ACCC has not received a “flood of complaints” but, said Mr Sims, “with an organisation like Amazon coming in we do need to make sure both they and others don’t break the law”.
The ACCC will be watching Amazon to make sure it doesn’t mislead consumers by not providing guarantee rights in the event products are defective and to ensure there are no unfair contract terms with Amazon suppliers.
“Likewise we’ll be watching what other companies do in relation to anti-competitive activity,” Mr Sims said.
The ACCC has noted comments by Woolworths chairman Gordon Cairns, who warned last week suppliers risked losing business with major retailers and having brands replaced with private labels if Amazon undercut the chains on price.
“We’re very sensitive to the way supermarkets treat suppliers given their history and we certainly take notice of any threats made and that certainly seemed to be a bit of a threat,” Mr Sims said.
In the US brand owners have been enthusiastic about supplying Amazon because they can set minimum resale prices to protect brand equity.
However, in Australia where resale price maintenance is illegal, some consumer goods brands have refused to supply online retailers at all, forcing companies such as Kogan.com and Catch Group to source key products through parallel import channels.
“They don’t want to see their products in an online price war,” said one retailer, who declined to be named.
In a speech in Sydney on Thursday, Mr Sims will warn Australian firms that the competition watchdog will not protect them from competition from new players such as Amazon – even if it means some firms will fail.
“In competitive markets, some firms prosper while others go out of business,” Mr Sims will tell the RBB economics 2017 Australian conference.
Mr Sims says some of the loudest opponents of changes to the so-called effects test have suggested Amazon’s expansion could be anti-competitive and have called on the ACCC to intervene.
“It is hard to see otherwise than that Amazon’s entry into Australia will be good for consumers, despite it not being good for incumbent retailers,” he said.
Meanwhile, at the request of BP and Woolworths, the ACCC has delayed for the third time making a final decision on BP’s proposed $1.8 billion acquisition of Woolworths’ fuel business.
The postponement, until December 14, comes four months after the ACCC raised concerns the deal may reduce competition in fuel and convenience retailing and lead to higher pump prices by removing a strong competitor
Follow us: @FinancialReview on Twitter | financialreview on Facebook
Leave a Reply
Want to join the discussion?Feel free to contribute!