ACCC warns it will defend small online retailers in 2012

The head of the Australian Competition and Consumer Commission has warned it will crack down on established companies trying to make it harder for new, online stores to do business.

In a speech to the Australia-Israel Chamber of Commerce, Rod Sims outlined a number of key areas the ACCC will be focusing on this year, including mergers and price fixing, but the online market was named as being “front and centre”.

“The online world will be front and centre of our focus in 2012,” Sims said. “As we all know, it is growing exponentially with some fascinating effects where, for example, established businesses with otherwise high entry barriers can now be challenged.”

“We must ensure this can be done without established companies breaching the Act to protect themselves from competition from these new and emerging online players.”

The ACCC has already proven how it is keen to crack down on businesses harming smaller online players, engaging a number of businesses that have been allegedly engaging in price maintenance.

Most recently, Eternal Beauty Products has been allegedly engaging in online price maintenance, with the company accused by the ACCC of pressuring retailers to sell goods at a certain price.

In August 2011, the ACCC said an aquarium products supplier, AquaDepot Imports, had also been engaging in maintenance. The company admitted this was the case, and was forced to contact retailers telling them they could sell goods at whatever prices they wanted.

And in January last year, a jewellery wholesaler known as Allure Gold was found to have sent a letter to independent resellers, instructing them to not sell products for anything less than 18% under the recommended retail price.

Sims also told SmartCompany last month the ACCC is investigating more cases, and will be looking at this issue much more closely over the next year.

“We do have investigations underway. We’re looking at online businesses that are being held back through a variety of means, not just prince maintenance but also refusal to supply,” he said at the time.

While it isn’t necessarily illegal to pick and choose which companies wholesalers do business with, it is unlawful to force businesses to sell products at a certain price – otherwise known as price maintenance.

Meanwhile, Sims has also reached out to businesses about supposed anticompetitive actions taken by supermarket giant Woolworths and Coles, saying accusations are not enough and it needs evidence to take any action.

”If people have concerns, come to us with the evidence. It is all very well for some of the industry representatives and others to talk about behaviour that is going on there, but we need evidence,” he said yesterday.

The comments come as the ACCC has received a number of complaints regarding the supermarkets, as farmers and suppliers come under more pressure as the two major chains continue to make dramatic price cuts.

A number of food production and packaging companies have hit the wall in the past year, although it is unknown how many of these were directly or indirectly related to the price pressure in the industry.

Sims said it will protect whistle-blowers.

”They can come and talk to us confidentially and if we can get a number of people talking to us confidentially and we can build up a picture then we can take action in a general sense rather than doing it in a way that exposes that individual.”