The ACCC steps in to help us bag a bargain

Published On 13/06/2012 | By Monique Nymeyer | Cartels, Consumer protection, Enforcement

Australian consumers, like consumers in many other countries, love to shop online.  Web-savvy fashion moguls can navigate the world’s virtual shopping mall and locate their favourite pieces within a matter of minutes – and often at a price that is cheaper than advertised at the store down the street.

However, our growing tendency to click through an online checkout rather than step through a boutique door has raised some concern.  Some Australian distributors contend they cannot match the prices available on international shopping websites like ASOS and Shopbop, which may not be subject to the same taxes and import duties as their local counterparts.

On 11 May 2012, The Age reported that International Fashion Group, an Australian clothing distributor, had reached an agreement with US denim brands Paige Denim and AG Adriano Goldschmied to prevent those brands also being available to Australian customers online.  It was also noted that a number of other fashion distributors had reached similar agreements or were negotiating to set prices or limit supply to Australia.

Shortly after, the ACCC announced that it will investigate Australian clothing importers who are alleged to have entered into arrangements with international suppliers to prevent Australian consumers from being able to purchase certain brands at lower prices on overseas websites.  An area of focus for the ACCC’s investigation will be to determine whether any of the arrangements between suppliers and distributors are likely to substantially lessen competition or involve suppliers controlling prices.  Any arrangements to this effect may contravene the Competition and Consumer Act; in particular, the cartel prohibitions (for price fixing), the per se prohibition on resale price maintenance, and / or the prohibition on exclusive dealing arrangements which substantially lessen competition in a market in Australia.

Striking a balance between shopping online and supporting local retailers who bring international labels to our shores is a contentious issue.  On the one hand, Australian distributors, some of whom hold wholesale rights to certain brands within Australia, contend they cannot compete with overseas sellers.   On the other hand, consumer groups such as Choice are advocating the ACCC investigate potential restrictive arrangements between Australian distributors and international brands on the basis that they may disadvantage Australian consumers.

On a similar note, the Australian Government is currently undertaking a parliamentary inquiry into the prices of IT hardware and software products sold in Australia over the internet or in retail outlets as compared to markets in the US, UK and economies in the Asia-Pacific.  Further information in relation to the parliamentary Inquiry into IT Pricing is available at http://www.aph.gov.au/Parliamentary_Business/Committees/House_of_Representatives_Committees?url=ic/itpricing/index.htm.

Photo credit: derÄsthet / Foter / CC BY

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