ACCC institutes proceedings against Mitsubishi Electric Australia for alleged resale price maintenance

20 November 2013

The Australian Competition and Consumer Commission has filed proceedings in the Federal Court against Mitsubishi Electric Australia Pty Ltd (Mitsubishi Electric) for allegedly engaging in resale price maintenance.

Resale price maintenance occurs when a supplier induces or attempts to induce a business customer to not resell or advertise goods or services below a minimum specified price.  Resale price maintenance is prohibited by section 48 of the Competition and Consumer Act 2010 (Cth).

The ACCC alleges that on three occasions between 2009 and 2011, Mitsubishi Electric through the conduct of its senior managers:

(a) induced and attempted to induce one of its dealers, Mannix Electrical Pty Ltd (Mannix) not to sell Mitsubishi Electric branded air conditioning products at prices below a minimum specified price; and

(b) terminated Mannix’s ‘dealer’ status and reclassified it to ‘contractor’ status for reasons including Mannix’s failure to increase its prices of Mitsubishi Electric branded air conditioning products to the minimum specified price.

Mannix operates retail stores in South Australia, Queensland and Victoria as Mannix Airconditioning and Airconditioning Warehouse Sales.

The ACCC alleges that Mitsubishi Electric’s conduct was partly driven by complaints it received from other dealers it supplied, who were Mannix’s competitors.

“Resale price maintenance can inhibit traders from competing for customers because they are unable to discount the price of products they sell. Such conduct is a concern to the ACCC, particularly where traders put pressure on their supplier to stop their competitors from discounting,” ACCC Chairman Rod Sims said.

The ACCC is seeking declarations, injunctions, pecuniary penalties and costs.

The matter has been filed in the Federal Court’s South Australian registry, with a directions hearing listed for 13 December 2013.

Mitsubishi Electric has cooperated with the ACCC’s investigation to date, and joint submissions and consent orders which are sought by the parties have been filed with the court.

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