The Federal Court in Melbourne has imposed penalties of $90,000 against Eternal Beauty Products Pty Ltd and its sole director, Penny Rider, a wholesaler and retailer of skin care products, for engaging in resale price maintenance.
Eternal Beauty, for a period of nine months through a series of telephone and email communications attempted to stop two online retailers discounting its products on their websites.
Eternal Beauty is a supplier of women’s beauty products and is the sole Australian distributor of Eyesential (eye cream) and The Lift (face cream).
Resale price maintenance occurs when a supplier requires a business customer to not sell or advertise goods below a minimum price specified by the supplier.
This limits the ability of traders to engage in price competition.
“Businesses are free to sell their products at prices below suppliers’ recommended retail prices if they wish,” ACCC chairman Rod Sims said.
“The ACCC takes seriously any attempts by suppliers to prevent discounting of their products, which affects the fundamental right of traders to compete for business.
But for the co-operation and early admissions by the company and Ms Rider the ACCC would have sought higher penalties.”
Eternal Beauty was ordered by consent to pay a pecuniary penalty of $80,000. Rider, who admitted to being knowingly concerned in each contravention by Eternal Beauty, was ordered to pay a pecuniary penalty of $10,000.
The penalties were imposed by Justice Murphy of the Federal Court of Melbourne following Australian Competition and Consumer Commission action.
His Honour Justice Murphy acknowledged the seriousness of resale price maintenance but noted the respondents’ conduct was at the lower end of the scale.
Accordingly, the penalty awarded for that scale of conduct was appropriate.
In addition to the penalties, Justice Murphy made declarations that Eternal Beauty and Rider engaged in specific acts of resale price maintenance in breach of section 48 of the Competition and Consumer Act 2010.
Justice Murphy also ordered Eternal Beauty to pay a contribution to the ACCC’s costs of $10,000 and establish a trade practices compliance program.
The declarations and orders were made by consent.
Prior to the orders, Eternal Beauty voluntarily sent letters to all of its retailers and informed them that resale price maintenance is illegal and retailers were entitled to independently set the price at which they offer those products for sale.
