Australian businesses restrict or ban on-line sales

eBay has found that many Australian businesses are banning or blocking sales of their products online.


A survey of eBay’s larger sellers found some 78% had experienced one or another type of online selling ban or restriction by suppliers.

Deborah Sharkey, Vice-President, eBay Australia,

Deborah Sharkey, Vice-President, eBay Australia,

Deborah Sharkey, eBay Australia’s vice-president, speaking at a Canberra PR launch of the survey results, said the situation needs to change.

“Restrictive practices by wholesalers …mean that local businesses are unable to offer the full range of goods their customers want, and that needs to change.”

* 35% faced issues with manufacturers/supplier trying to prevent them from selling their goods on the internet or on particular websites

* 25% were required to sell their products at or around a particular recommended retail prices

* 22% experience unexplained problems from manufacturers or suppliers which they suspect was due to selling their products over the internet.

Her comments were backed up by eBay seller, Kirsty Chapman-Smith, co-owner of party supplies company – Deals4kids.

She suggested that sometimes it is established, bricks ‘n mortar retailers, fearful of online competition, who are trying to protect their position by pressuring their suppliers to ban online sales.

“Many suppliers I’ve spoken to don’t want to lose the business of long-standing retail partners, despite the fact that more and more consumers are moving online to make their purchases.”

Certainly there is clear evidence of such practices in Australia.

Pool equipment vendors, such as Automated Pool Products (manufacturers of the market-leading Kreepy Krauly pool cleaner) and Zodiac, for example, are well-known in the industry for their bans and restrictions on dealers selling online.

Zodiac’s eBuyer warning page

Indeed Zodiac makes no secret of its approach.

It features a warning page on its web-site, entitled eBuyer Beware.

“You may see Zodiac pool equipment advertised online at discounted prices through auction websites such as eBay and non-authorised dealer websites.”

The sentence which follows immediately after clearly implies that buying Zodiac equipment online will void the warranty. It says that:

“Purchasing Zodiac equipment from non-authorised dealers will automatically void the product warranty.”

Of course, there is no reason why discounted prices for Zodiac products should not be available from online vendors, nor why an online vendor should not be an authorised dealer.

However the Zodiac eBuyer warning appears to imply both those things.

So such a warning may well be illegal, under Australia’s Trade Practices Law’s.

However there is little sign that the Australian government, or its Competition and Consumer Commission is interested in doing anything about the issue of suppliers’ online bans, despite their corrupting influence on the Australian e-commerce marketplace.

Nor is there any indication that eBay is likely to take any action.

A spokesman from eBay’s Australian public relations agents – Edelman, told eCommerce Report that whilst eBay itself wasn’t planning to lodge any complaints with the ACCC, there were recent positive signs of government action on the general issue.

He pointed to a recent ACCC court-enforceable under-taking secured against the local distributor of Dragon sunglasses.

Dragon had required its online re-sellers to sign a trading agreement that banned discounts to recommended retail prices.

As ACCC chairman Graeme Samuel commented, this is quite illegal.

“It is not acceptable or legal for a business to restrict an online retailer from discounting and providing consumers a better deal.”

The law protecting the freedom of independent retailers to determine the price at which they both advertise and sell applies regardless of whether the retailer operates out of a store or on the internet.”

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