Power tool supplier Techtronic has been ordered to pay penalties totalling $15 million after admitting it had engaged in resale price maintenance conduct in relation to Milwaukee branded products, including power tools, hand tools and accessories.
The total penalties, ordered by the Federal Court, are the highest imposed for resale price maintenance in Australia. Resale price maintenance (also known as RPM) occurs when a supplier of goods specifies a minimum price below which a reseller must not supply, offer to supply, advertise, or display those goods for sale.
“The ACCC submitted to the Court that this level of penalty was appropriate given the seriousness, duration and extent of Techtronic’s conduct. It sends a strong signal to deter others from engaging in RPM, and should serve as a warning for all other businesses,” ACCC Deputy Chair Mick Keogh said.
“Resale price maintenance is illegal because it is harmful to price competition, which may mean consumers pay a higher price than they would in a truly competitive market.”
Techtronic admitted that, between January 2016 and July 2021, it entered into 97 agreements with retailers and dealers which restricted the sale of Milwaukee products below a specified minimum price.
Techtronic also admitted it enforced the restrictive RPM provisions in its contracts 29 times between December 2016 and May 2020, for example by issuing warnings to dealers who offered to sell, or sold, Milwaukee branded products below the specified minimum price, or by withholding supply from two dealers.
The Court also ordered Techtronic to post corrective notices on its website and to its dealers, implement a compliance program and pay part of the ACCC’s costs. The Federal Court will publish its written reasons at a later date.
Techtronic admitted to engaging in resale price maintenance, and cooperated with the ACCC. The parties filed joint submissions, a statement of agreed facts, and joint proposed orders.
Background
Techtronic is the Australian subsidiary of Hong Kong based Techtronic Industries Co Ltd, and is a major supplier of power tools in Australia. Its registered office and principal place of business are in Melbourne, Victoria.
Techtronic is a wholesale supplier of Milwaukee products nationally to dealers and dealer groups, including major retailers with multiple outlets and buying groups of multiple independent retailers.
The ACCC instituted proceedings against Techtronic in November 2021.