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Australia: Sims won’t prevent Amazon from undercutting competitors

 |  November 5, 2017

The Australian Competition and Consumer Commission’s chairman Rod Sims told the Financial Review in an interview that Amazon will not be restricted when it begins local operations.

Mr Sims said that too many people believe Amazon will automatically be successful and drive existing retailers to struggle. However, he counters this opinion by claiming that the arrival of Amazon will give downtrodden suppliers a new route to market and bring lower prices to shoppers in a shake-up likely to trigger an aggressive response from big retailers.

“In terms of misuse of market power, if you open a store in a new town and you set a common price point, you are going to lose money initially if you don’t have scale,” Mr Sims said. “Eventually if you get your business plan right you will make money at that price point, that is in no way illegal.”

“It is not illegal if Wesfarmers do it with a Coles supermarket in a new town and it is not illegal if Amazon comes in and sets a price point that only makes money at a certain scale.”

Full Content: Financial Review

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