Rachel Wells
The Age
Acts of lessening competition or controlling prices represent a breach competition laws.
THE competition watchdog will launch an investigation into clothing importers who are reaching agreements with overseas suppliers to stop selling their products to Australians on websites or instructing them to lift their web prices.
Australian Competition and Consumer Commission chairman Rod Sims has acknowledged that anti-competitive practices revealed by The Age last week could breach competition legislation.
He said an investigation would be launched, and companies found breaking the law would be prosecuted. ”We are extremely committed to having a close look at this,” he said.
”Making sure Australian consumers benefit from the revolution that we’ve got in the online world is a top priority … We will therefore use the [Competition and Consumer] act to its fullest.”
Mr Sims, who has described the online economy as ”the biggest regulatory challenge in a generation”, said any evidence of exclusive dealing that substantially lessened competition, or of suppliers controlling prices would not be tolerated.
”We will make sure that the established players aren’t doing anything against the [law] to block consumers from getting the benefit of the extra competition that they can get through buying online,” he said.
Mr Sims said companies found to be engaging in these practices could face heavy fines.
”In some instances we might issue an infringement notice that requires them to pay $6600 per offence … but we could also instigate legal proceedings and, depending on the circumstances, the size of the company, and how much detriment was caused, they could be looking at fines of millions of dollars.”
The consumer group Choice this week called on the watchdog to investigate the growing practice among Australian fashion distributors to reach agreements with the international brands they import to lift prices or stop shipping here.
The Age understands the practice is widespread in the fashion industry, with local distributors successfully preventing dozens of well-known labels – including Paige Denim and Dr Denim – from being sold on popular overseas websites such as Asos and the Amazon-owned Shopbop.
Other overseas labels such as True Religion have agreed to continue to ship to Australia but at higher prices.
Choice spokeswoman Ingrid Just applauded the ACCC decision. But local distributors said the crackdown could spell the end for many Australian clothing wholesalers and retailers.
Fashion Distributors Association of Australia chairman Stephan Cornips said such deals were only being made because the federal government had refused to lower the $1000 GST-free threshold for imported goods. ”There is a very simple solution to all of this,” he said.
”If the GST threshold was lowered to $50 or $100 then distributors wouldn’t be going down this path because then you instantly become more competitive … Without this we are going to see more retailers go under and retail staff lose their jobs.”
Nicola Reindorf, of fashion distribution agency Flying Standard, which recently forced popular UK women’s clothing brand Motel – which it distributes in Australia – to lift its online store prices for Australian consumers, says any crackdown will force local distributors to ”throw their hands in the air and give up”.
”Before online, businesses here used to charge whatever they wanted for imported stuff … but now it’s not about greed. We’re just trying to cover our taxes and duties and make some kind of margin.”
Subscribe to our free mailing list and always be the first to receive the latest news and updates.