The competition watchdog has revived an old favourite with court action against Brisbane-based B&K Holdings, trading as FE Sport, for alleged resale price maintenance.
Resale price maintenance is the illegal practice where a supplier prevents, or tries to prevent, retailers advertising or selling products below a specified price.
In this case, the Australian Competition and Consumer Commission accuses FE Sports of trying to dictate the sale price of cycling and sporting products.
Such action used to be common in the early days of competition law, but is less so now.
In part this reflects changes in economic thinking, with some arguing it is not so damaging to dictate prices when the real competition is between different manufacturers.
The ACCC also has varying priorities including, more recently, cartel and consumer breaches by big companies.
Others argue the law is now well understood and manufacturers know their way around the law by using “recommended retail prices”.
But the economic thinking has now swung back in favour of a legal crackdown, with some arguing price fixing is part of cartel activity.
The ACCC has taken periodic cases, including last year’s action against outdoor heating supplier Bromic, which settled the case with an undertaking, and one in 2013 against Mitsubishi Electric over air conditioners, in which a $2.2 million fine was levied against the company.
In this case the ACCC says it warned FE Sports three times against the practice.
In a statement the ACCC said: “It is alleged that between February 2017 and June 2019, FE Sports provided 328 dealer agreements to existing or prospective dealers containing terms that prohibited the dealer from advertising or promoting the products of certain brands on the dealer’s website for less than the recommended retail price (RRP) set by FE Sports.”
Commissioner Sarah Court said “We allege FE Sports made it known that dealers were not to advertise products at a discount to the recommended retail price.
“Resale price maintenance is anti-competitive conduct which limits the ability of retailers to compete on price and ultimately can mean consumers pay more for products, because the retailers are stopped from discounting,” she added.
Ms Court said: “All businesses are reminded that it is illegal to dictate minimum prices to retailers, who are entitled to advertise and sell products at discounted prices.”
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