We won’t save you from Amazon, ACCC boss warns

ACCC boss Rod Sims has warned Aussie retailers to stop complaining about the launch of Amazon, because competition is “good for consumers”.

Amazon’s entry into the Australian retail sector has upset some industry giants. Picture: Joe Castro/AAP

AMAZON Australia will be “good for consumers”, according to Australian Competition and Consumer Commission boss Rod Sims.

Speaking at the RBB Economics Conference, the ACCC chairman said recent changes to the Competition and Consumer Act 2010 had helped to protect competition in Australia.

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.

“What has been fascinating recently is that some of the loudest opponents of [the law changes] have suggested that the arrival of Amazon, a new entrant to the Australian market, could be anti-competitive,” he said.

“ ... 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.

“Eventually if you get your business plan right you will make money at that price point; even if it damages incumbent firms and puts some out of business, this is in no way illegal.

“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.”

Some of the biggest opponents of Amazon Australia include Harvey Norman boss Gerry Harvey, who told news.com.au that Amazon was a “parasite” that “contributes nothing to society” in February.

“They’re parasites, they just want to pay everyone minimum wages ... If you had a choice you’d say don’t let them in,” Mr Harvey said.

“They come in and because of their power in the marketplace they can sell things as loss-leaders to make no money and send everyone broke, then put up the price.”

Another vocal Amazon critic has been businessman and entrepreneur Dick Smith, who told Channel 7’s Sunrise last week that Amazon’s launch would lead to Aussie job losses.

“It is extreme capitalism. It will make a fortune, and take hundreds of millions of dollars out of this country and sent back to the United States,” he said.

“Australians will lose jobs. Every time you buy something from (them) you do not think of the person who is trying to pay off his house and has just lost his job.”

However, Mr Sims was adamant that competition would benefit the country.

“Our primary objective in implementing Australia’s competition laws is to protect the competitive process: to allow firms, large or small, to compete on their merits,” he said.

“Firms that offer consumers a better deal should be rewarded irrespective of their size.”