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The Australian arm of Hong Kong-based supplier Techtronic has been ordered to pay a $15 million fine after it was found to be engaging in resale price maintenance with Milwaukee power tools, hand tools and accessories.
Resale price maintenance - also known as RPM - happens when a supplier prevents, or attempts to prevent, resellers of their goods from selling their products at a specified minimum price.
The case was brought to the Federal Court by the Australian Competition and Consumer Commission (ACCC), which initially filed the proceedings against Techtronic in November 2021.
Techtronic admitted that between January 2016 and July 2021, it entered into 97 agreements with retailers and dealers that restricted the sale of Milwaukee products below a specified minimum price.
The company also admitted it enforced RPM provisions in its contracts 29 times between December 2016 and May 2020 by issuing warnings to dealers who offered to sell, or sold, Milwaukee branded products below the specified minimum price.
The penalty is the highest that has ever been imposed for resale price maintenance in Australia.
“The ACCC submitted to the court that this level of penalty was appropriate given the seriousness, duration and extent of Techtronic’s conduct,” ACCC deputy chair Mick Keogh said.
“It sends a strong signal to deter others from engaging in RPM, and should serve as a warning for all other businesses.
“Resale price maintenance is illegal because it is harmful to price competition, which may mean consumers pay a higher price than they would in a truly competitive market.”
The Federal Court ordered Techtronic to post corrective notices on its website and to its dealers, as well as implement a compliance program and pay part of the ACCC’s costs.
Techtronic admitted to engaging in resale price maintenance, and has cooperated with the ACCC.
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