Resale Price Maintenance authorisation
Although RPM is prohibited per se in Australia, it is possible for parties to seek authorisation of their conduct. Parties wishing to do so must apply before engaging in the RPM conduct and must be able to demonstrate that the proposed conduct would result (or be likely to result) in such a benefit to the public that it should be allowed to take place: section 88(8A) and section 90(8). If successful, section 48 will not prohibit the authorised conduct.
The option for authorisation was introduced in 1995, following a recommendation of the Hilmer Committee, which noted that 'economic theory associated with RPM [presents] a convincing argument that RPM can, in certain circumstances, enhance economic efficiency' (para 58 Hilmer Report).
Until 2014, however, there had been no authorisation applications. The first ever authorisation of RPM (following the first application for RPM authorisation) was granted in December 2014:
In 2015 the Harper Report recommended (rec 34) that ther per se prohibition of minimum RPM be retained, but that 'notification' be made available for RPM.
Briefly, notification would involve a corporation, which is proposing to engage in RPM, notifying the ACCC setting out the particulars of the proposed conduct. While the notification is in place the conduct referred to in the notice will not contravene the Act. However, if the ACCC is satisfied that the corporation is:
- engaging in conduct of a kind that would constitute RPM (and referred to in the relevant notice); and
- that conduct would not result in a benefit to the public likely to outweigh the detriment to hte public from engaging in the conduct
it may give notice in writing to the company, after which the company will have 30 days to discontinue the conduct or risk contravening the Act.
See my summary of proposed RPM changes, including new model notification provision.