Trying to stop discounting costs Acer Computer $83,000
Published12 Nov 1999
In the Auckland High Court today Acer Computer New Zealand Limited admitted that it breached the Commerce Act by trying to stop two wholesalers discounting Acer scanners.
Justice Salmon ordered Acer to pay a penalty of $82,000 plus $1,000 towards the Commerce Commission's costs.
Commission Chairman John Belgrave said that the Court's decision is a warning to all businesses distributors must not impose minimum resale prices.
"It is up to sellers to set their own prices and up to customers to decide if they will accept those prices.
"Distributors setting resale prices is fundamentally anti-competitive it prevents customer choice influencing competition over prices. Customers lose out because they end up paying more."
In this case Acer drafted an agreement under which it could cut supply to Times Technology Limited and Z-com Computer Wholesale Limited if they sold Acer scanners for less than prices set by Acer.
Between January and March this year Times and Z-com were involved in what was effectively a price war involving heavy discounting of Acer scanners.
Acer arranged meetings with Times and Z-com on March 29, March 30 and April 1. It attempted to have Times and Z-com agree to minimum mark-ups above the prices that they paid to Acer. The mark-ups were 15 percent, or 12 percent for larger volume sales.
One of the wholesalers complained to the Commission, the Commission investigated and today Acer admitted in Court that it had breached the Act.
Mr Belgrave said that the seriousness of such anti-competitive behaviour is shown by the high penalty.
"Acer is not a big company in New Zealand, and its attempt failed Times and Z-com did not follow its prices. Yet the Court still ordered it to pay $83,000.
"Distributors can recommend resale prices, but any attempt to enforce them can have serious consequences. If the attempt succeeds, customers are harmed. If the distributor finds itself in court, it can expect heavy penalties."
Background
Acer Computer New Zealand Limited is ultimately owned by Acer Inc, which is the third largest personal computer manufacturer in the world. Acer NZ has only an approximately 5 percent share of the relevant computer markets in New Zealand.
Times Technology Limited is a wholesaler of computer hardware in the North Island. Z-Com Computer Wholesale Limited is a wholesaler of computer hardware and software throughout New Zealand.
