The competition watchdog has warned it will not protect retailers from Amazon, saying the e-commerce giant's imminent arrival will be good for customers.
Australian Competition and Consumer Commission chairman Rod Sims said some retailers had called on the watchdog to act against Amazon's business model amid fears they would be put out of business but, he added, even if Amazon did damage some incumbent firms, it was in "no way illegal".
"In competitive markets, some firms prosper while others go out of business. This is a harsh reality," Mr Sims said in a speech due to be delivered in Sydney on Thursday.
He said that while this might seem unfair, the process in turn drives innovation, better business practices and lower prices for Australians.
Changes to the Competition and Consumer act, which passed in November, prohibits large companies taking action that could reduce competition in the market.
Mr Sims said some of the loudest opponents of the changes to section 46 of the competition act had suggested that Amazon's arrival could be anti-competitive.
"To me, this shows how much of the recent debate about section 46 was misplaced," the chairman said.
"It is hard to see otherwise than that Amazon's entry into Australia will be good for consumers, despite it not being good for incumbent retailers."
Mr Sims said the changes to section 46 and the introduction of a concerted practices provision were both clearly needed to protect competition in Australia.
"The old s46 left the ACCC powerless to deal with a range of behaviour by powerful firms in many parts of the value chain who were stopping their competitors competing on their merits," Mr Sims said.
"The Australian economy will be all the better for this."
