A $500,000 penalty was imposed by Justice Spender in the Federal Court, Brisbane today on Sundaze Australia Pty Ltd, a major distributor of Oakley brand sunglasses.
The Australian Competition and Consumer Commission had alleged that between 1987 and 1998, Sundaze were licensed to distribute Oakley products to retailers and resellers, and from 1993 became the exclusive distributor of Oakley throughout Australia.
During that time Sundaze allegedly refused to supply Oakley products to retailers who were likely to discount the price, and also induced other retailers not to sell Oakley products at less than the retail price the supplier specified.
State sales agents employed by Sundaze are alleged to have enforced this conduct throughout Queensland, northern New South Wales, Victoria and South Australia by inducing retailers, many of whom are franchisees or small business operators, not to sell Oakley products or advertise them for sale at less than the price specified by Sundaze.
Sundaze admitted to the Court that it had specified minimum prices below which certain Oakley products could not be sold or advertised for sale.
The Federal Court also imposed injunctions that restrain the company, and its directors and agents, from engaging in resale price maintenance. Sundaze has agreed to contribute $120,000 towards the ACCC's costs of the investigation.
"The ACCC views incidents of resale price maintenance conduct as serious. This is reflected by the amount of the penalty imposed by the Federal Court in this case," ACCC Chairman, Professor Allan Fels, said today.
"Not only does the conduct artificially maintain higher prices for consumers, it also adversely affects retailers, who are often small businesses, from carrying on their business as they see fit.
"The ACCC is aware that suppliers try to maintain a prestige image for their products by stopping retailers from discounting. They should realise that this is unlawful and provides no excuse for the breach.
"Suppliers must understand that if they attempt to stop discounting of their products by resellers, they run the significant risk of breaching the Trade Practices Act 1974, and the ACCC will take action.
"Once Sundaze recognised the seriousness of the issues being investigated, it cooperated with the ACCC by admitting the conduct and in doing so has saved the Court and the taxpayers considerable time and money.
"Sundaze has also agreed to implement a trade practices compliance program to assist it and its staff to appropriately market its products without breaching the Trade Practices Act.
"The ACCC recommends that all companies, no matter how large or small, should seriously look at developing similar programs to minimise the risk of breaching the Act".
The Australian Competition and Consumer Commission had alleged that between 1987 and 1998, Sundaze were licensed to distribute Oakley products to retailers and resellers, and from 1993 became the exclusive distributor of Oakley throughout Australia.
During that time Sundaze allegedly refused to supply Oakley products to retailers who were likely to discount the price, and also induced other retailers not to sell Oakley products at less than the retail price the supplier specified.
State sales agents employed by Sundaze are alleged to have enforced this conduct throughout Queensland, northern New South Wales, Victoria and South Australia by inducing retailers, many of whom are franchisees or small business operators, not to sell Oakley products or advertise them for sale at less than the price specified by Sundaze.
Sundaze admitted to the Court that it had specified minimum prices below which certain Oakley products could not be sold or advertised for sale.
The Federal Court also imposed injunctions that restrain the company, and its directors and agents, from engaging in resale price maintenance. Sundaze has agreed to contribute $120,000 towards the ACCC's costs of the investigation.
"The ACCC views incidents of resale price maintenance conduct as serious. This is reflected by the amount of the penalty imposed by the Federal Court in this case," ACCC Chairman, Professor Allan Fels, said today.
"Not only does the conduct artificially maintain higher prices for consumers, it also adversely affects retailers, who are often small businesses, from carrying on their business as they see fit.
"The ACCC is aware that suppliers try to maintain a prestige image for their products by stopping retailers from discounting. They should realise that this is unlawful and provides no excuse for the breach.
"Suppliers must understand that if they attempt to stop discounting of their products by resellers, they run the significant risk of breaching the Trade Practices Act 1974, and the ACCC will take action.
"Once Sundaze recognised the seriousness of the issues being investigated, it cooperated with the ACCC by admitting the conduct and in doing so has saved the Court and the taxpayers considerable time and money.
"Sundaze has also agreed to implement a trade practices compliance program to assist it and its staff to appropriately market its products without breaching the Trade Practices Act.
"The ACCC recommends that all companies, no matter how large or small, should seriously look at developing similar programs to minimise the risk of breaching the Act".