The Commerce Commission and Toyota New Zealand Limited today reached a settlement of court proceedings issued by the Commission against Toyota in April 1995. Toyota has agreed to pay a penalty of $250,000 plus $10,000 costs.
The Commission began the court action against Toyota following an investigation carried out in 1994.
The case relates to Toyota's operation of its Fleet Sales Assistance Scheme during 1992 and 1993, under which Toyota assisted its franchised dealers with discounts given by them on sales of new Toyotas to fleet owners.
Commission Chairman Dr Alan Bollard said that the operation of the scheme had acted to limit discounts Toyota dealers might offer when fleet owners were buying new vehicles, which is in contravention of the resale price maintenance provisions of the Commerce Act.
The Commission acknowledged that Toyota had ceased the practice prior to the Commission's investigation and had co-operated with the Commission. Toyota agreed to having judgment entered against it, and the suggested penalty of $250,000 was accepted by Justice Doogue the Wellington High Court today as appropriate.
Dr Bollard said that the Act prohibits resale price maintenance because it can limit competition in a most fundamental way - it can limit customers' ability to influence prices.
"There is no evidence in this case, that Toyota's guidelines worked, or that there was damage to buyers," he said.
"However resale price maintenance is anti-competitive and can lead to considerably higher costs for consumers. The Commission will take action against it whenever necessary." He said.
Dr Bollard said that this penalty is a strong warning to any businesses considering resale price maintenance.
Background
Resale price maintenance occurs when a manufacturer or distributor tries to enforce minimum prices at which its goods can be resold. Recommended prices are not prohibited, but any attempts to enforce them are.
Media contact: Communications Officer Vincent Cholewa
