ACCC allows resale price maintenance for HP PPS Australia’s online marketplace stores

The ACCC has decided to allow a resale price maintenance (RPM) notification lodged by HP PPS Australia Pty Limited (HP) in relation sales via HP Online Marketplace Stores to stand at this time. HP Online Marketplace Stores are HP operated stores hosted on online market places, such as the HP store on eBay.

Under the proposed business model, HP will appoint a third party distributor that will on-sell HP products direct to customers and will receive payments from customers. The third party will also be responsible for the physical supply of HP products to customers who purchase through HP Online Marketplace Stores. HP remains in control of product and marketing strategies and, in particular, specifying the prices for which the third party will sell the HP products to customers (the RPM conduct).

The proposed RPM conduct will only apply to products sold through the HP Online Marketplace Stores by the third-party distributor. The RPM conduct will not apply to any sale of products by the operator of the relevant online market place or by any other third party selling HP products on the online market place.

Based on the information before it, the ACCC considers that the likely benefit from HP’s RPM Conduct will outweigh the likely public detriment from the conduct. Accordingly, the ACCC has decided to allow the notification to stand.

In coming to this view, the ACCC notes that the RPM Conduct applies only to sales through the HP Online Marketplace Stores, which represents a very small portion of total sales of HP products. Other suppliers of HP products, and competing products, are likely to constrain any attempt by HP to use the RPM Conduct to raise retail prices.

The ACCC also considers that the RPM Conduct is likely to allow HP to realise public benefits in the form of efficiencies through appointing a third party with expertise in logistics services to fulfil orders placed through HP’s Online Store while maintaining control over the operation of pricing and promotional strategies, which HP is likely to be best placed to manage.

The ACCC considered a related RPM Notification in relation to HP’s own online store last year and issued a Statement of Reasons allowing that initial application to stand in October 2019. The current notification extends this arrangement to HP branded stores that it operates on online market places such as eBay.

The RPM Conduct notified by HP differs from most other RPM conduct the ACCC has considered to date. It applies to only one reseller – the third party that will fulfil orders placed through the HP Online Marketplace Stores. The likely benefits and detriments resulting from RPM conduct will be assessed on a case by case basis. Accordingly, the ACCC’s decision in this matter should not be seen as indicative of its views about RPM conduct more broadly.

Further information about the ACCC’s decision is available on the ACCC’s public register at:HP PPS Australia Pty Ltd.

 

Published date: 
2 October 2020

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