Resale price maintenance – not cool

Published On 28/11/2013 | By Pam Cue | Enforcement

The ACCC has instituted proceedings in the Federal Court against Mitsubishi Electric Australia Pty Ltd (Mitsubishi Electric) for alleged resale price maintenance.

The ACCC alleged that, on three occasions between 2009 and 2011, Mitsubishi Electric, induced one of its dealers, Mannix Electrical Pty Ltd (Mannix), not to sell Mitsubishi Electric air conditioners below a specified minimum price, ultimately terminating Mannix’s status as a ‘dealer’ when it failed to comply.

According to the ACCC, Mitsubishi Electric’s conduct was motivated by complaints from a number of its dealers, who are Mannix’s competitors, regarding Mannix’s pricing.

In a media release last week, ACCC Chairman Rod Sims said that “Resale price maintenance can inhibit traders from competing for customers because they are unable to discount the price of products they sell. Such conduct is a concern to the ACCC, particularly where traders put pressure on their supplier to stop their competitors from discounting”.

The ACCC is seeking declarations, injunctions, pecuniary penalties and cost orders. Mitsubishi Electric is cooperating with the ACCC and has filed joint submissions and consent orders with the Court. A directions hearing is listed for 13 December 2013.

The ACCC has prosecuted a number of companies for resale price maintenance in recent years, with this new case being in line with Rod Sims’ promise to take on more competition cases.

Resale price maintenance is prohibited outright under section 48 of the Competition and Consumer Act 2010 (Cth) (CCA). The purpose of the prohibition is to prevent manufacturers from specifying a minimum resale price for their goods or services, or taking other actions to ensure that their distributors do not resell the manufacturer’s goods or services below a minimum specified price. Sections 96 and 96A of the CCA set out the types of conduct which constitute ‘resale price maintenance’.

Photo credit – Flickr / udonONE / BB BY 2.0

Like this post? Share it... Email this to someonePrint this pageShare on LinkedInShare on FacebookTweet about this on TwitterShare on Google+

About The Author

is a solicitor in the Competition Law and Regulatory Group at King & Wood Mallesons Sydney.

Leave a Reply

Your email address will not be published.

19 − thirteen =