The Chairman of the Australian Competition and Consumer Commission (ACCC), Rod Sims, has said the watchdog welcomes Amazon to Australia and will allow the online retailer to set low prices.
Speaking to Fairfax Media, Sims said that the ACCC will monitor Amazon’s market power over the coming years, and that the company could set low prices without breaching competition laws.
“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,” 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.”
He added: “If a new bank came in and priced really low to win business, you and I would be standing on our chairs applauding,
“We welcome Amazon, we think it’s good for competition. I don’t think the Coles, Woolworths and other big players will lie down, they will fight back and that is good outcome for consumers.”
While Amazon has so far refused to comment on when it will begin its operation in Australia, there is a lot of speculation building that it will kick off in Australia this month. Amazon has previously refused to comment when asked by TheShout if it plans to sell alcohol in Australia, saying it does not comment on speculation.
Sims also told Fairfax that he did not believe the speculation of many that Amazon will simply drive retailers to the wall.
“Everyone is assuming that Amazon is going to be a screaming success and they will put everyone else out of business. That may not happen,” Sims said, adding that Amazon can actually give some suppliers a new route to market.
Amazon is busily preparing for its Australian launch with the building of a large distribution warehouse in Dandenong South and with Australia Post revealing recently that it is in advanced talks with Amazon to provide express delivery services.
