Oobi Baby penalised $40,000 for resale price maintenance

The Federal Court has ordered Oobi Baby Pty Ltd to pay $40,000 in penalties after the company admitted illegally inflating the internet retail prices of infant toy and clothing products it designs, imports and distributes to retailers throughout Australia. 

Oobi admitted engaging in resale price maintenance by:

• making it known to its internet-based retailers that Oobi would not supply them with products unless they agreed not to sell those products at a discount
• attempting to induce its internet retailers to raise their prices to prices specified by Oobi 
• refusing to supply its products to certain internet retailers because they had discounted its products
• making statements its internet retailers were likely to understand as statements of the price at which they had to sell products, and
• offering to enter into an agreement to supply its products to internet retailers on the condition that the retailer would not sell Oobi products at a price less than the price specified by Oobi.

Ms Alexandra Riggs, Oobi's sole director and owner, admitted being knowingly concerned in the contraventions by Oobi. The Australian Competition and Consumer Commission accepts that, although ignorance of the law is no defence, she was unaware of the illegality of her actions.

"This case demonstrates that traders need to be aware of what the law says or risk getting themselves into serious trouble," ACCC Chairman, Mr Graeme Samuel, said today. "The internet has given many more people the opportunity to get into business, but they have to realise that all the same laws apply online.  Spending a few minutes checking out the publications on the ACCC website or discussing an issue with the ACCC Infocentre can save them a lot of time and money later on." 

The court orders come as a result of proceedings commenced on 16 July 2008 in the Fast Track List of the Federal Court, Melbourne by the ACCC. In response to joint submissions by the parties, the court:

• declared that Oobi had contravened section 48 of the Trade Practices Act 1974 and that Ms Riggs was knowingly concerned in the contraventions by the company
• made injunctions restraining Oobi and Ms Riggs from engaging in similar conduct in future
• ordered Oobi to pay a pecuniary penalty of $40,000
• ordered Oobi to publish a corrective notice on its website www.oobi.com.au and write to all its retail customers informing them of its resale price maintenance conduct
• ordered Ms Riggs to attend trade practices law compliance training and
• ordered Oobi to contribute $10,000 to the ACCC's costs.

Publications of assistance to small business, available on the ACCC website, include Resale Price Maintenance – News for Business and the recently updated Small Business and the Trade Practices Act.  The ACCC Infocentre can be contacted on 1300 302 502 or through the electronic inquiry form on the ACCC website.