Following up on our post earlier this year, Narta International Pty Ltd (Narta), the largest independent electrical buying group in Australasia, was denied authorisation for proposed arrangements allowing it to set a minimum advertising price on a range of consumer electrical goods, in a determination issued by the Australian Competition and Consumer Commission (ACCC) on 11 April 2013. The ACCC was not satisfied that the conduct was likely to result in public benefit that would outweigh the likely detriment to the public.
Narta represents 29 electrical goods retailers (including Bing Lee, David Jones, JB Hi-Fi and Radio Rentals) who supply over 30 brands in the market. Narta applied to the ACCC for authorisation pursuant to section 88(1) of the Competition and Consumer Act 2010 (Cth) (CCA) to make and give effect to an amended version of its Code of Conduct under which its members would agree to abide by any minimum advertising prices (MAP), unilaterally set by Narta, on a range of goods collectively acquired by its members, namely Beko branded electrical goods, new release electrical products or exclusive models of electrical goods (the Conduct).
The ACCC, found the Conduct was likely to result in some public benefit as there would be limited increased competition between electrical good retailers and limited increased choice of retail services but that this public benefit was minimal and would not outweigh the public detriment caused by the Conduct. ACCC Deputy Chair Dr Michael Schaper said that, [t]he ACCC has denied authorisation because Narta’s proposed conduct would be likely to result in significant public detriment by reducing competition between retailers and raising both the advertised and selling process of electrical products”. The ACCC noted that in some categories of electrical products Narta members as whole had a “significant market presence” and that Narta indicated on its public website that its members included “category dominant specialists”. The ACCC accordingly concluded that the authorisation to apply a MAP was likely to have the effect of lessening competition between retailers on a broad scope of electrical products.