Topfield distributor penalised $238 000 for resale price maintenance

A penalty of $238 000 has been imposed on Digital Products Group Pty Limited, the national distributor of Topfield branded digital set top boxes, for engaging in resale price maintenance in contravention of section 48* of the Trade Practices Act 1974.

The penalty was imposed by Justice Tracey of the Federal Court following proceedings instituted by the Australian Competition and Consumer Commission. 

Digital Products Group had earlier admitted to the court that in its dealings with a Melbourne based retailer it had breached section 48 of the Act by:

• on two occasions attempting to induce and on 17 occasions inducing the retailer not to advertise certain Topfield digital set top boxes supplied by Digital Products Group at prices less than prices specified by the company, and
• using a statement of price that was likely to have been understood by the retailer as the price below which the retailer was not to advertise a certain Topfield digital set top box for sale.

The contraventions took place between October 2003 and June 2005.

Digital Products Group's sole director, Mr Jai Kemp, admitted being knowingly concerned in 11 of the contraventions and was penalised $42 000.  Digital Product Group's national sales manager, Mr Mark Dopson, admitted being knowingly concerned in nine of the contraventions and was penalised $17 500.

As well as imposing these penalties, Justice Tracey ordered injunctions against Digital Products Group, Mr Kemp and Mr Dopson preventing them from engaging in similar conduct in future.  He also ordered that Digital Products Group implement a trade practices compliance program.

The orders were made with the consent of the parties.

"It is important that wholesalers understand that they cannot try to prevent retailers from advertising or selling their products below particular prices", ACCC Chairman, Mr Graeme Samuel, said today. "This case demonstrates that wholesalers and their individual representatives that do so face the risk of substantial monetary penalties being imposed against them.

"The ability of a business to advertise products at a discounted price can assist consumers in getting the best deal and encourages other businesses to compete on price".

Background

*Section 48 of the Trade Practices Act 1974 prohibits 'resale price maintenance'.  A company engages in resale price maintenance where, among other things, it induces or attempts to induce a person not to advertise or sell a product which that company has supplied to that person for less than a specified price or where it uses in relation to any product that it supplies to a person a statement of price that is likely to be understood by that person as the price below which that product is not to be advertised or sold.