Price fixing no child's play

A matter settled cooperatively before the Federal Court in Brisbane highlights the dangers of business operators acting in ignorance of the law.

The Australian Competition and Consumer Commission has taken action against International Maritime Correspondence College Pty Ltd (IMCC) trading as Labrador Children's Playschool, and its owner operator, Terry Balson, for an alleged attempt to fix prices in relation to child care services on the Gold Coast.

The matter came to the ACCC's attention when Mr Balson telephoned the ACCC's Brisbane office to discuss his concerns with increasing costs to his industry, and the possibility of establishing a 'minimum fee charging practice' with other operators in his area. Mr Balson had sent a letter to six other child care centres in the Gold Coast area inviting them to enter into an arrangement to agree on the minimum fees to be charged for their childcare services. Mr Balson's call alerted ACCC staff to the likelihood that he had already attempted to induce a price-fixing agreement.

The ACCC alleged that Mr Balson's conduct was an attempt to fix prices, in breach of section 45 of the Trade Practices Act. Mr Balson was not aware of the implications of his conduct, and has fully co-operated with the ACCC in facilitating an appropriate and timely resolution of this matter.

Justice Drummond in the Federal Court, Brisbane, declared that the alleged conduct breaches the Act and ordered Mr Balson undertake a trade practices compliance program. He also restrained both IMCC and Mr Balson for a period of five years from engaging in the same or similar conduct. The orders were made by consent.

"This case demonstrates the importance for the small business community to maintain open lines of communication with the ACCC", ACCC Chairman, Professor Allan Fels, said today.

"In light of the circumstances by which this matter came to the ACCC's attention, and in view of Mr Balson’s co-operation, the ACCC did not pursue penalties in this matter, and did not seek an order as to costs".

However, this matter also highlights the fact that price fixing is always viewed as extremely serious conduct, and businesses need to realise that no matter what their size, they need to comply with the law.