Australia: ACCC warns retailers on Amazon

Competition watchdog chairman Rod Sims has warned retailers that he will not protect them from Amazon if the e-commerce giant undercuts them on prices when it enters Australia.

The Australian Competition and Consumer Commission (ACCC) chairman will tell a conference in Sydney on Thursday, November 30, that Amazon’s impending entry into Australia will be good for consumers, even if it damages some incumbent businesses.

Mr Sims warned retailers that Amazon was here — and that complaints about the online giant would fall on deaf ears.

“In competitive markets, there will be winners and losers,” he said.

“Protecting the competitive process is about ensuring winners and losers are determined by the quality of the offers firms make to consumers.

“In competitive markets, some firms prosper while others go out of business. This is a harsh reality. To some this may seem unfair.

“But it is this process that drives innovation, better business practices and lower prices for all Australians.”

Mr Sims said some big retailers had called on the ACCC “to act against Amazon’s business model”, but that the commission would not be getting involved.

Changes to the competition act passed into law on November 6 introduced an “effects test,”, which prohibits large companies taking action that has the purpose, effect or likely effect of substantially reducing competition in a market. Previously, the ACCC had to show the company had taken advantage of its market power to muscle out competitors.

“What has been fascinating recently is that some of the loudest opponents of the recent Harper Section 46 changes [to the competition act] have suggested that the arrival of Amazon, a new entrant to the Australian market, could be anti-competitive.”

Full Content: Financial Review

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