The ACCC has issued a draft determination proposing to re-authorise David Jones department stores to invite “concession stores”, which operate separate businesses within David Jones stores and/or sell through David Jones' online retail store, to take part in David Jones promotions.
The ACCC has previously granted authorisation to David Jones for substantially the same conduct three times, each time for five years. The current authorisation is due to expire on 17 April 2019, which is why David Jones is seeking reauthorisation.
The ACCC considers that the arrangements are likely to continue to promote competition through greater discounting by David Jones and concession stores than in the absence of coordination by David Jones. This discounting is, in turn, likely to lead to a competitive response from David Jones’ rivals and concession stores’ rivals, benefiting customers through lower prices and more innovative service offerings.
The ACCC also considers that if concession stores were not invited to participate when David Jones runs promotions, customers may be confused and disappointed to find that concession store products are excluded from the promotion. Therefore, the arrangements are likely to result in a public benefit through providing greater clarity and reducing the number of concession store exclusions from promotions.
While any type of coordination between competitors has the potential to reduce competition and discounting, the ACCC is not aware of any evidence that these arrangements have had this effect. Rather, the ACCC considers that the arrangements have promoted competition. Further, the ACCC considers that the potential for competitive detriment is limited by the fact that the arrangements are voluntary and because the presence of competition is likely to ensure that the incentive for David Jones and concession stores to compete would remain, with or without the arrangements.
The ACCC has proposed to re-authorise the arrangements for a further 10 years.
The ACCC invites submissions in relation to this draft determination before making its final decision. Please refer to the ACCC’s Public Register for further information.