Techtronic in court for alleged resale price maintenance over power tools

ACCC

The ACCC has instituted Federal Court proceedings against Techtronic Industries Australia Pty Limited (Techtronic), alleging it engaged in resale price maintenance in relation to the wholesale supply of Milwaukee brand power tools, hand tools and accessories, in breach of the Competition and Consumer Act.

Resale price maintenance (also known as RPM) occurs when a supplier engages in conduct which prevents, or attempts to prevent, resellers of their goods or services from advertising or selling the goods or services below a specified minimum price.

The ACCC alleges that, between 2015 and 2021, Techtronic engaged in RPM conduct, including by entering into 96 agreements with independent dealers and buying groups which restricted the sale of Milwaukee products below a specified minimum price.

The ACCC also alleges that Techtronic enforced these agreements by issuing reminders, warnings and breach notices to dealers that advertised or sold Milwaukee products below the specified minimum price.

In addition, it is alleged that Techtronic withheld supply from two of the dealers to enforce the restrictions on price discounting below the specified minimum price.

“Requiring retailers to charge at or above a minimum price for products in the way that we allege Techtronic has done, stifles retailers’ ability to compete on price, which ultimately hurts consumers. This is particularly so in industries where retailers would otherwise strongly compete on price, such as by offering price match guarantees to consumers,” ACCC Deputy Chair Mick Keogh said.

“We alleged that Techtronic’s actions meant Milwaukee power tool dealers could not sell the products at a discount below the specified minimum price, depriving consumers of the chance to benefit from lower prices driven by competition.”

The ACCC is seeking penalties, declarations, injunctions, a compliance program order, an order for corrective advertising and costs.

Background

Techtronic is the Australian subsidiary of Hong Kong based Techtronic Industries Co Ltd, and is a major supplier of power tools in Australia. Its registered office and principal place of business are in Melbourne, Victoria.

Techtronic is a wholesale supplier of Milwaukee products nationally to dealers and dealer groups, including major retailers with multiple outlets and buying groups of multiple independent retailers.

Note

Resale price maintenance occurs where a supplier:

  • makes it known they will not supply unless a reseller agrees to advertise or sell at a price not less than a specified minimum price;
  • induces or attempts to induce the reseller not to advertise or sell below a specified minimum price;
  • enters into agreements or offers to enter into agreements for the supply of goods on terms that the reseller does not to advertise or sell below a specified minimum price;
  • withholds supply of goods or services because a reseller, or a purchaser from the reseller, has not agreed not to advertise or sell below a specified minimum price; or has advertised or sold (or is likely to sell) at a price below a specified minimum price;
  • uses, in relation to goods or services supplied or that may be supplied, a statement as to price which is likely to be understood by the purchaser as a minimum resale price.

Resale price maintenance is strictly prohibited by the Competition and Consumer Act and is not subject to a substantially lessening competition test. More information about resale price maintenance can be found at Imposing minimum resale prices.

Companies may lodge a notification of Resale Price Maintenance conduct or apply for authorisation of proposed RPM conduct, which will be permitted if the likely public benefit from the resale price maintenance conduct outweighs the likely detriment from the conduct.

In June 2020, the ACCC rejected a proposal by Stanley Black & Decker to set a minimum advertised price for Dewalt brand power tools and accessories, following a resale price maintenance notification it had lodged with the ACCC.

In March 2021, the Federal Court ordered B & K Holdings (QLD) Pty Ltd, trading as FE Sports to pay a $350,000 penalty after it declared by consent that FE Sports had engaged in resale price maintenance in relation to cycling and sporting products.

In September 2021, Nero Bathrooms admitted to likely resale price maintenance by withholding supply of its tapware products from a small independent retailer who declined to raise its advertised prices.

Concise Statement

The attached documents below contain the ACCC’s initiating court documents in relation to this matter. We will not be uploading further documents in the event these initial documents are subsequently amended.

ACCC v Techtronic Concise Statement (
PDF 615.35 KB )

/Public Release. This material from the originating organization/author(s) may be of a point-in-time nature, edited for clarity, style and length. The views and opinions expressed are those of the author(s).View in full here.