Optima Technology Solutions Pty Ltd, the national supplier of Optima computer products, has admitted to the Australian Competition and Consumer Commission that it had engaged in resale price maintenance.
Under section 48 of the Trade Practices Act 1974, which prohibits resale price maintenance, a supplier cannot require a business customer to sell the supplier's goods at a minimum price specified by the supplier. To do so would limit the ability of the business customer to advertise discounts for the products, which is essential for retailers and others who wish to engage in price competition.
In response to an ACCC investigation into a complaint, Optima admitted it had told two of its dealers they should stop discounting and raise their prices for Optima computers to Optima's recommended retail prices. The dealers were threatened with having the supply of Optima products withheld or their dealership cancelled.
The ACCC has accepted court-enforceable undertakings from Optima to meet its concerns that Optima had breached the Act. Optima has undertaken that it will:
- not engage in resale price maintenance for a period of three years
- implement a trade practices law compliance program
- implement an audit process to determine whether any other Optima dealers have been subjected to resale price maintenance, and
- write to all Optima dealers to advise them:
- of the outcome of the ACCC's investigation
- of their freedom to set their own prices for Optima products, and
- that they should not place pressure on other dealers who offer discounted prices on Optima products, and should not seek to induce Optima to take action against dealers who offer discounted prices.
"Businesses must be free to sell their products at prices below suppliers' recommended retail prices", ACCC Chairman, Mr Graeme Samuel, said today. "In a market as competitive as the computer retail market, it is vital for both business and consumers that this freedom is protected.
"When buying items such as computers and other electronic goods, consumers like to shop around (including over the internet) in order to get the best deal. This encourages businesses to compete on price and, by taking advantage of this competition, enables consumers to buy at lower prices.
"The outcome of this matter should put the computer industry on notice that the ACCC takes seriously any attempts by suppliers to prevent discounting of their products, and will not hesitate to take action in appropriate circumstances".