Aquanaut admits Commerce Act breach:

21 June 2003-04

Aquanaut admits Commerce Act breach:
ordered to pay $60,000

The Commerce Commission is highlighting to businesses that the practice of resale price maintenance, where a supplier of goods specifies the minimum price that a reseller can charge for those goods, is prohibited under the Commerce Act, and that the Commission will take action where such behaviour is detected.

Dive equipment wholesaler Aquanaut Pty Limited has been ordered to pay $60,000 plus $5,000 costs in the Auckland High Court today following an admission that it contravened the Commerce Act by trying to prevent a Canterbury dive shop from offering discounts on Aquanaut dive equipment.

Commission Chair Paula Rebstock said Aquanaut’s behaviour was a clear contravention of the provisions of the Commerce Act that prohibit anti-competitive behaviour.

“For a supplier to prohibit a retailer from discounting below a particular price in this way reduces competition in a most fundamental way – by limiting customers’ ability to obtain the best possible prices,” Ms Rebstock said.

The Commission laid charges against Aquanaut for alleged resale price maintenance in August 2002 following an investigation into the company.

Aquanaut admitted that over the period between November 1999 and July 2001, it induced or attempted to induce the Kaiapoi Dive Shop to refrain from selling any Aquanaut products below the supplier’s recommended retail price. Aquanaut agreed to having judgment entered against it and the Court accepted the suggested penalty of $60,000 as appropriate.

“The Commission acknowledges Aquanaut’s actions in assisting the Commission in achieving an early resolution of the court proceedings. However, its co-operation does not lessen the seriousness of the breach,” Ms Rebstock said.

“Aquanaut attempted to inhibit competition between its distributors by preventing its distributors from discounting Aquanaut products to the detriment of consumers.”

“Moreover, the conduct was undertaken by senior management, who should have been well aware that their conduct was likely to contravene the Commerce Act,” Ms Rebstock said.

In his judgment, Justice Williams commented that it was a determined effort by Aquanaut to ensure compliance with its resale price maintenance regime.

“In many instances breaches of the prohibition against resale price maintenance are difficult to detect, given they normally occur between close business associates. That increases the need for deterrence to be a factor in the penalty imposed for proscribed behaviour.”

ENDS

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