RPM on Festool and Fein power tools allowed to continue

The ACCC has decided not to take further action at this time in respect of the resale price maintenance (RPM) notification lodged by Tooltechnic Systems (Aust) Pty Ltd (Tooltechnic) on 12 February 2018.

The notification gives Tooltechnic legal protection to impose a minimum price for the retail sale of its Festool and Fein power tools.

The ACCC can revoke a notification if it is satisfied that the likely benefit to the public from the notified conduct will not outweigh the likely public detriment from the conduct. The ACCC’s assessment of the notified Festool and Fein conduct has been informed by observing the practical effect of the introduction of identical RPM conduct by Tooltechnic on Festool products in Australia over the past three years under an existing authorisation.

In particular, evidence including feedback from dealers suggests that setting a guaranteed minimum price for these products has given a large network of Festool/Fein dealers the certainty they need to invest in facilities and staff to provide better levels of pre- and post-sales retail services. This results in consumers being able to make more informed decisions about the purchase and maintenance of these relatively complex products. The ACCC considers that this is also likely to result in increased service-based competition between Festool/Fein power tool dealers (particularly enabling smaller dealers to better compete with larger dealers) and promote competition between power tool brands.

While there is clear public detriment in this case because the discounts that would otherwise be offered to some customers will no longer be available, the extent of the detriment is likely to be reduced by the fact that Festool and Fein have relatively low market shares and face numerous competitors.

Further information about the notification, including a copy of the ACCC’s Statement of Reasons, is available on the resale price maintenance notifications register. This is the first RPM notification received by the ACCC since amendments to the legislation commenced in 2017. It should not be assumed that because the ACCC has allowed this notification to stand, the ACCC will not object to future notifications for RPM.

Published date: 
25 July 2018