Dear Mr xxxx,
Thank you for your email of 12 December 2011 to the Australian Competition and Consumer Commission (ACCC) regarding price fixing. The reference number for this matter is xxxx.
For price fixing agreements to be considered illegal:
· there must be a ‘contract, arrangement or understanding’ (the agreement)
· two or more of the parties to the agreement must be competitors
· the agreement must have the purpose or effect (or likely effect) of fixing, controlling or maintaining the price of goods or services
· what is fixed must be the price for—or a discount, allowance, rebate or credit in relation to—goods or services supplied or acquired by the parties to the agreement.
The scenario you have identified is therefore likely to constitute price fixing if the agreement is between two or more competitors.
However, the conduct you describe may also constitute Resale Price Maintenance (RPM). Any arrangement between a supplier and a reseller that means the reseller will not advertise, display or sell the goods the supplier supplies below a specified price is illegal.
It is also illegal for a supplier to cut off, or threaten to cut off, supply to a reseller (wholesale or retail) because they have been discounting goods or advertising discounts below prices set by the supplier.
Further details about these anti-competition provisions of the Act can be accessed at http://www.accc.gov.au/content/index.../itemId/816373
Thank you for contacting the ACCC.
Ph: 1300 302 502