Dealing with competitors online

Competition and eBusiness

The development of online trading enables consumers and suppliers in any jurisdiction to trade with each other. This creates greater opportunities for traders to deal with a wider range of customers, and greater choice and more competitive prices for consumers. eCommerce also provides opportunities for traders to introduce more efficient business processes, such as eProcurement mechanisms.

While this creates opportunities for vigorous competition, it can also provide incentives for anti-competitive conduct. Traders need to be aware that they are subject to the same competition laws that apply to offline commercial activities.

Price fixing and collective boycotts

Price fixing between competitors—whether they operate online, offline, or in both mediums—is prohibited by the Competition and Consumer Act 2010. For further information on price fixing see Related topics.

If competing businesses, including online businesses agree to prevent, restrict or limit the supply to, or acquisition of goods or services from, particular persons or classes of persons, this may breach the collective boycott provisions of the Competition and Consumer Act.

Resale price maintenance

The Competition and Consumer Act prohibits suppliers from attempting to induce you not to sell the supplier’s products online at a lower price than the price specified by the supplier. For further information about resale price maintenance see Related topics below.

Refusal to deal or other forms of discrimination between online and offline traders

Generally, the Competition and Consumer Act does not prohibit a supplier refusing to supply you with goods or services, supplying on certain conditions, or supplying on different terms because you are an online trader. However, there are some circumstances where such conduct can raise issues under the Act. For further information about when refusals to deal may raise competition issues see Related topics.

Misuse of market power

Misuse of market power applies in the online world in the same way that it would in the offline world. For example, if an offline supplier with a substantial degree of market power refuses to supply you for the purpose of preventing you from competing with its own online store, this could raise issues of misuse of market power. For further information about what is a misuse of market power see Related topics.

Mergers, joint ventures and strategic alliances

The rules on mergers, joint ventures and strategic alliances apply to both online and offline ventures. If a proposed merger, joint venture or alliance is likely to result in a substantial lessening of competition in any market—whether it is an online, offline or combined online and offline market—this may raise issues under the Competition and Consumer Act. For further information on the rules about mergers, joint ventures and strategic alliances see Related topics.

B2B marketplaces

One type of joint venture or alliance that is popular in online trading is an arrangement between suppliers or buyers in an industry to establish a B2B marketplace. This is a website that enables businesses to buy and sell to each other.

While most B2B marketplaces do not raise issues under the Competition and Consumer Act, some marketplaces, particularly those controlled and operated jointly by some competitors in a market can raise issues.

When dealing with a B2B marketplace, you should make sure that you know if it is owned or controlled by any of your competitors, and if so, what safeguards have been put in place to ensure confidentiality of your trading information, and that your customers or suppliers have unbiased access to your products and catalogues.

What about my competitors in other jurisdictions, are they subject to the same laws?

This will depend on the circumstances. If your online competitors are carrying on a regular business in selling goods or services to customers within Australia, then they are likely to be subject to Australian competition laws. Don’t forget that if you are carrying on a business in other countries, you may need to comply with those laws as well.

Where do I get more information?

For more information about your rights and responsibilities under the Competition and Consumer Act, including information about e-commerce, please consult the ACCC's Small business and the Trade Practices Act publication listed below.