It is amazing how a fifteen minute chat on parallel imports and an earlier e-mail ends up with a one-liner that gets it wrong. But that was the case in an article in the Age today. Let me summarise my views and for those interested, the full e-mail to the journalist is below.
- On the information in the article, there is no issue of ‘price fixing’ (or collusion) but may be issues of resale price maintenance (RPM) depending on the actual contracts or agreements. The ACCC has been following this closely for internet sales generally;
- There is almost certainly no issue of abuse of market power with the sort of businesses (small fashion houses) referred to in the article;
- Exclusive distribution licenses for Australia are not illegal but can raise competition law issues if businesses abuse market power or ‘substantially lessen competition’. For a summary of a previous related decision see here.
- The Bricks and Mortar complainants are like children putting a finger in the dyke that is about to breach. Unless they get business models to compete with on-line businesses they will be swept away. Attempts to block parallel importing just hurts consumers and will be ‘avoided’ by clever entrepreneurs. The government should act to assist this form of competition, not to block it, despite the squeals from the vested interests in the retail sector.
So what should the ACCC do? Keep a look out for RPM (and I would be surprised if they were not doing that already).
(Original e-mail to journalist)