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Competition watchdog says Amazon will be good for consumers, if not retailers

ACCC Chairman Rod Sims has said the arrival of Amazon won’t be good news for some incumbent retailers, but it is for consumers, and that the watchdog won’t intervene to “protect” retailers from the e-commerce giant.

Delivering a speech in Sydney today,  Sims outlined how the recently legislated changes to the Competition and Consumer Act 2010 (CCA), especially s46, help the ACCC protect the competitive process by allowing firms, big and small, to compete on their merits.

“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,” 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.”

Under s46, firms with a substantial degree of market power are prohibited from engaging in conduct that has the purpose, effect or likely effect of substantially lessening competition (SLC) in a market.

“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.”

To accompany reforms to the CCA, the ACCC has released interim guidelines and formed an SLC Unit to investigate claims of a substantial lessening of competition.

“SLC Unit investigators are focussed solely on substantial lessening of competition work. The unit will initially be directed to investigate cases under the reformed s46 and the concerted practices provisions. We expect the SLC Unit will be a catalyst for the reinvigoration of our competition investigations and enforcement work,” Mr Sims said.

“Intensive investigations will be concentrated and timely as the SLC Unit’s key role will be to simplify rather than complicate the theories of harm. This will lead to quicker outcomes.”

Sims explained that the changes to s46 and the introduction of a concerted practices provision were both clearly needed to protect competition in Australia.

“The old s46 left the ACCC powerless to deal with a range of behaviour by powerful firms in many parts of the value chain who were stopping their competitors competing on their merits. Both of these changes will see more SLC cases taken and the Australian economy will be all the better for this,” Sims said.


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