TEAC Australia has become the latest set-top box dealer to be busted by the Australian Competition and Consumer Commission (ACCC) for resale price maintenance and has been fined $175,000 in penalties with national sales manager, Warren Allison, ordered to pay a further $15,000.
Justice Kenny in the Melbourne court yesterday ordered TEAC to pay the sum for breaching the resale price maintenance provisions of the Trade Practices Act 1974 and instituted proceedings against Allison personally in relation to conduct that sought to stop an unnamed independent electrical retailer from advertising prices below the price specified by TEAC.
The following further penalties were ordered:
– declarations that TEAC engaged in resale price maintenance in contravention of section 48 of the Act and that Mr Allison was knowingly concerned in the contravening conduct
– injunctions restraining the same contravening conduct in future
– TEAC send a letter to all TEAC’s retail customers advising them that they are free to set the price for the products they purchase from TEAC and resell
– TEAC implement a trade practices compliance program, and
– a contribution by the Respondents of $10,000 to the ACCC’s costs.
Resale price maintenance is prohibited under section 48 of the Trade Practices Act, and occurs where suppliers prevent or discourage retailers from advertising or selling their products at lower prices than those specified by the supplier.
“The respondents have co-operated with the ACCC and acknowledged their liability at the earliest stage,” said Justice Kenny yesterday.
“These are mitigating factors that result in a substantial discount from the penalties that would otherwise be appropriate.”
ACCC Chairman, Graeme Samuel, said some companies are not aware that resale price maintenance is prohibited.
“Suppliers should appreciate that their ability to dictate or unduly influence the prices of customers reselling goods is quite limited. It’s not for TEAC or its management to determine the selling price of its customers; that decision is one for the customers having regard to their own considerations, competitiveness and efficiency,” he said.
“Resale price maintenance prevents retailers from competing on price and it prevents consumers from getting the best price they can. It is conduct which the ACCC will vigorously pursue.”
Last year former Topfield set-top box distributor, Digital Products Group, was ordered to pay $297,500, while the company’s director, Jai Kemp, was ordered to pay a further $17,000 for retail price maintenance.