GPS navigator manufacturer Navman has been hit with a $1.25million fine after the ACCC found it had tried to force stores to not discount its products.
GPS navigator manufacturer Navman has been hit with a $1.25million fine after the ACCC found it had tried to force stores to not discount its products.
The penalty of $1.25 million was imposed on Navman and penalties of $80,000 and $30,000 respectively on Christopher Baird, a former director of Navman and the former Australasian sales manager of Navman, David King.
The penalty ordered by the court is one of the highest on record for resale price maintenance offences.
In his judgment, Federal Court Justice Jacobson said, "The details of the contraventions show that Navman's conduct was not merely deliberate. It was pursued in an aggressive and high-handed way by the company's most senior managers."
Navman admitted that in regard to certain products, it sought to ensure that dealers did not sell below the benchmark which it used for the pricing. Navman had actually cut off supply to some retailers.
Navman particularly tried to stop online stores from discounting below specific prices.
"This is a case of deliberate systemic conduct occurring over several years," said ACCC Chairman, Mr Graeme Samuel. "The size of this penalty is indicative of the seriousness with which resale price maintenance is viewed by the Federal Court and the ACCC.
"Businesses must be free to sell their products at prices below suppliers' recommended retail prices.
"When buying items such as GPS 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.
"Price competition is fundamental to competitive markets and this behaviour does nothing but fetter this competitive process.
"This outcome should serve as a warning to other suppliers in this emerging GPS industry and to suppliers generally that if they attempt to impose a benchmark price, or stop resellers discounting their products, they run a significant risk of breaching the Trade Practices Act, and the penalty for that may be severe," Mr Samuel said.