The Australian Competition and Consumer Commission has accepted court enforceable undertakings from hearing aid wholesaler and retailer, Oticon Australia Pty Ltd, which acknowledged that it engaged in resale price maintenance in the supply of hearing aids to retailers in Australia.
Resale price maintenance occurs when suppliers prevent, or attempt to prevent, independent retailers or distributors from advertising or selling products below a specified price. Resale price maintenance is prohibited under the Competition and Consumer Act 2010.
“Businesses must be able to compete for customers by discounting the price of products they sell, including selling below the suppliers’ recommended retail prices.” ACCC Chairman Rod Sims said.
“This price freedom encourages competition in the marketplace and benefits consumers who shop around for the best price. The ACCC will not tolerate suppliers or wholesalers who attempt to stop retailers from discounting.”
In response to an ACCC investigation Oticon Australia has accepted it engaged in resale price maintenance in September 2011 by:
- Agreeing to supply hearing aids to a retailer on condition that the retailer sell Oticon Australia hearing aids at prices much closer to Oticon Australia’s recommended retail prices; and
- Offering to supply hearing aids to another retailer on the condition that it would sell at a price within 15% of Oticon Australia’s recommended retail prices.
Oticon Australia provided the ACCC with a court enforceable undertaking that it will:
- Refrain from engaging in resale price maintenance; and
- Maintain and continue to implement a compliance program.
Oticon Australia co-operated with the ACCC’s investigation and resolution of the matter. The ACCC noted that Oticon Australia voluntarily notified all of its retailers that prices in its recommended retail price lists are recommended prices only and there is no obligation to comply with the recommendation.
This is the sixth action the ACCC has taken in 2012 in relation to resale price maintenance. The ACCC has accepted five other court enforceable undertakings from a range of retailers engaged in this conduct for products such as aquarium products, alcoholic essences, chemical cleaning products and designer handbags.
The Federal Court also imposed a $90,000 penalty against Eternal Beauty Products Pty Ltd earlier this year for attempting to induce two retailers not to sell skin care products below those specified by Eternal Beauty.