Navman is a supplier of marine, personal and in car navigational equipment and has dealership and retail arrangements across Australia.
According to the Australian Competition and Consumer Commission Navman and its employees had engaged in resale price maintenance.
A penalty of $1.25 million was imposed on Navman and penalties of $80 000 and $30 000 respectively were also imposed on Mr Christopher Baird, a former director of Navman and the former Australasian sales manager of Navman, Mr David King.
The penalty ordered by the court is one of the highest for resale price maintenance conduct and follows the record $3.4 million penalties against the Jurlique cosmetics companies in February 2007, also for resale price maintenance.
The orders were made with the consent of the parties.
Resale price maintenance is prohibited under section 48 of the Trade Practices Act 1974, and occurs where suppliers prevent or discourage retailers from discounting their prices.
In his judgment, 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," he said.
Navman admitted that in regard to its marine products and sought to ensure that dealers did not sell below the benchmark which it used for the pricing of its marine products. Navman had actually cut off supply to some retailers.
In relation to its PCN products, Navman particularly sought to prevent discounting below specified prices by retailers via the internet.
This is a case of deliberate systemic conduct occurring over several years," ACCC Chairman, Graeme Samuel, said.
"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," he said.
According to Samuel 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.
"Price competition is fundamental to competitive markets and this behaviour does nothing but fetter this competitive process.
He said this outcome should serve as a warning to other suppliers in the 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.
Navman Australia penalised $1.25 million for resale price maintenance
By Lilia Guan on Jan 7, 2008 3:48PM