ACCC prosecutes computer supplier for price fixing

By James Wells

SYDNEY: Optima Technology Solutions, a supplier of Optima branded computer products sold through Good Guys, Retravision and Leading Edge has admitted that it has engaged in resale price maintenance, otherwise known as price fixing.

In response to an investigation by the Australian Consumer and Competition Commission (ACCC) 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.

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.

According to a statement by the ACCC Optima has agreed to court-enforceable undertakings after breaching 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 and implement an audit process to determine whether any other Optima dealers have been subjected to resale price maintenance.

Optima has also agreed to write to all dealers and 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, Graeme Samuel.

"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," Samuel said.

"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".

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