Copied from Sailing Anarchy

Hobie Cat Australasia Pty Ltd penalised $168,000 for resale price maintenance

The Federal Court of Australia has imposed a penalty of $168,000 on Hobie Cat Australasia Pty Ltd, a kayak and sailboat supplier, for engaging in resale price maintenance in contravention of section 48* of the Trade Practices Act 1974.

The Australian Competition and Consumer Commission instituted proceedings against Hobie in September 2007, alleging Hobie had engaged in resale price maintenance by including in its dealership agreements, terms which prohibited dealers from selling or advertising Hobie products below the recommended retail prices, or at prices no less than 10 per cent below the recommended retail prices.

After admissions by Hobie that it engaged in the conduct alleged, the ACCC and Hobie submitted agreed orders, including a proposed penalty figure, for consideration by the court.

Justice Finn imposed the penalty submitted and made consent orders, including:

declarations that Hobie engaged in resale price maintenance conduct in contravention of section 48 of the Trade Practices Act
injunctions restraining the same contravening conduct in future
Hobie establish a trade practices compliance program, and maintain that program for a period of three years
Hobie write to all of its dealers advising them that it had engaged in illegal conduct and that it cannot specify to retailers a minimum price below which goods are not to be sold, and
Hobie pay the ACCC's costs.
Justice Finn noted that while Hobie's conduct was "intentional and purposive" it "involved no knowing (or deliberate) contravention of the Act."

He also noted that the penalty was substantial and significant for a company of Hobie's size and was proportionate to the seriousness of its contraventions.

ACCC Chairman, Mr Graeme Samuel, said: "The outcome of this matter should drive home to businesses of all sizes that every care must be taken to ensure they are aware of their obligations under the Trade Practices Act. It also serves as a warning that the ACCC will vigorously pursue allegations of resale price maintenance in any industry to ensure there is fair play in the market place and lower prices for consumers."

I'm pretty sure Hobie USA does the same thing...they'd better watch out!

But is it illegal here?

Yeah, it sounds to me like it's pretty close to infringing on the Sherman and/or the Clayton Antitrust Acts. Not allowing dealers to advertise or sell products below MSRP lessens competition in a free market.

Though, provisions of dealer-protected areas may allow this loophole. I'm no lawyer though.

I think its ridiculous... a suppliers should have the right to mandate the rate its dealers charge. That actually promotes a fair chance for everyone to make a sale.

This is a legal method and utilized in the US and many different industries. I am not a lawyer, but I play one on TV <img src="http://www.catsailor.com/forums/images/graemlins/smile.gif" alt="" /> . (I know that is part of reseller contracts I deal with...)

Also it is my understanding the anti-sherman /anti-trust acts are more about disallowing monopolies and companies conspiring to artificially inflate / manipulating pricing (upward)... not creating limits that restrict underselling rates ...

Do you have the exact same feeling when you are purchasing a new automobile?

Hell no! I would be pissed if I couldn’t get some deal! LOL... <img src="http://www.catsailor.com/forums/images/graemlins/grin.gif" alt="" />

I am a capitalist 100%... and believe in fair trade (and even more in fair exchange...) I wasn’t saying I like this... just that it is legal and practiced in the US. I think its ridiculous they were fined... I FEEL it is the companies prerogative to charge how and what they want... it is the publics POWERS that determines if these practices are sound ... and they stay in business (afloat if you will)

Keep in mind most new auto promotions are from the main company, not the dealer... and it is for ALL dealers.

Post deleted by PTP

From my experience Hobie US does do the same thing.
I think Oakley practices this too... they mandate the prices to dealers and don't allow discounts.

It's not necessarily legal in the US. There was a supreme court decision last year on this topic Leegin_Creative_Leather_Products,_Inc._v._PSKS,_Inc. , and the waters are muddy. Talk to a lawyer if it is important to you.

It's absolutely legal here in the US to require businesses that sell your goods to not advertise prices lower than MSRP, if it is stated in some sort of 'dealer contract'. You could open your newspaper right now and find ads that have "CALL" or "Too Low to Publish Price" in the cost line. A pretty high percentage of companies have this practice here in the US, especially in the small boat industry.

That's not to say if you come down to your local dealer you won't get a deal on a boat. That's not the issue, it's the advertised pricing requirements that are the problem. Aussie laws are different than here.
I sell both Aussie boats and US boats and have read a lot about the different trade laws.

I can tell you from experience in cycling that this is practiced in the US, though I have known dealers who can get around it by not advertising certain "clearance" items.