The article deals with the question of why multichannel amplitude compression appears to have a negative rather than a positive effect on speech intelligibility by hearing-impaired listeners. It is argued that the small time constants of amplitude compression diminish the temporal as well as the spectral contrasts in the speech signal. According to the modulation-transfer function concept, this results in reduced intelligibility scores. Experimental evidence is reviewed indicating that the following two arguments in favor of amplitude compression in case of sensorineural hearing loss are not valid: (1) to compensate for the effects of loudness recruitment and (2) to get weak consonants above threshold. The author concludes that, in multichannel hearing aids, automatic gain control with time constants of 0.25-0.5 s should be given preference to amplitude compression.