ACCC v Humax Pty Ltd [2005] FCA 706

FEDERAL COURT OF AUSTRALIA

ACCC v Humax Pty Ltd [2005] FCA 706

TRADE PRACTICES – Resale price maintenance – agreed facts – consent orders sought – consideration of factors relevant to penalty

Trade Practices Act 1974 (Cth) ss 48, 76, 80, 86C and 96(3)(b)

BMW Australia Ltd v Australian Competition and Consumer Commission (2004) 207 ALR 452 - considered Australian Competition and Consumer Commission v Leahy Petroleum (No 2) (2005) 215 ALR 281 - applied AUSTRALIAN COMPETITION AND CONSUMER COMMISSION v HUMAX PTY LTD (ACN 110 119 063) AND ANDREW SONG VID 100 OF 2005 MERKEL J 10 JUNE 2005 MELBOURNE

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY VID 100 OF 2005

BETWEEN: AUSTRALIAN COMPETITION AND CONSUMER COMMISSION

APPLICANT

AND: HUMAX PTY LTD (ACN 110 119 063)

FIRST RESPONDENT

ANDREW SONG

SECOND RESPONDENT JUDGE: MERKEL J

DATE OF ORDER: 10 JUNE 2005

WHERE MADE: MELBOURNE

BY CONSENT THE COURT DECLARES THAT:

1. The First Respondent, by statements made by the Second Respondent in a telephone conversation with Narelle Lea Huett both on 10 September 2004 and on 13 September 2004, engaged in the practice of resale price maintenance in contravention of s 48 of the Trade Practices Act 1974 (Cth) ("the Act") by engaging in an act referred to in s 96(3)(b) of the Act by attempting to induce Kim David Huett and Narelle Lea Huett trading as Rapid Services ("Rapid Services") not to sell Humax HD-7000 Digital Set Top Boxes ("the Humax STBs"), which were supplied to Rapid Services by Multimedia Technology Pty Ltd who indirectly obtained the Humax STBs from the First Respondent, at a price less than a price specified by the First Respondent, namely: (a) $599.00 including GST; (b) the recommended retail price (RRP) for the Humax STBs; and (c) $570.00 including GST. 2. The First Respondent, by statements made by the Second Respondent in an email sent to Quontar Pty Ltd trading as Quontcom ("Quontcom") on 10 September 2004, engaged in the practice of resale price maintenance in contravention of s 48 of the Act by engaging in an act referred to in s 96(3)(b) of the Act by attempting to induce Quontcom not to sell the Humax STBs, which were supplied to Quontcom by Multimedia Technology Pty Ltd who indirectly obtained the Humax STBs from the First Respondent, at a price less than a price specified by the First Respondent, namely: (a) $599.00 including GST; and (b) the RRP for the Humax STBs. 3. The First Respondent, by statements made by the Second Respondent in a voice message left on the answering service of Luke Waples trading as Selpaw Services ("Selpaw Services") on 10 September 2004, engaged in the practice of resale price maintenance in contravention of s 48 of the Act by engaging in an act referred to in s 96(3)(b) of the Act by attempting to induce Selpaw Services not to sell the Humax STBs, which were supplied to Selpaw Services by Multimedia Technology Pty Ltd who indirectly obtained the Humax STBs from the First Respondent, at a price less than a price specified by the First Respondent, namely: (a) $599.00 including GST; and (b) the RRP for the Humax STBs. 4. The Second Respondent was directly knowingly concerned in, and party to, the First Respondent's conduct of engaging in the practice of resale price maintenance referred to in paragraphs 1, 2 and 3 of this order in contravention of s 48 of the Act by: (a) the statements made by the Second Respondent in telephone conversations with Narelle Huett on 10 and 13 September 2004 referred to in paragraph 1 of this order; (b) the statements made by the Second Respondent in the email sent to Quontcom on 10 September 2004 referred to in paragraph 2 of this order; and (c) the statements made by the Second Respondent in the voice message left on the answering service of Selpaw Services on 10 September 2004 referred to in paragraph 3 of this order - and thereby the Second Respondent engaged in conduct of the kind referred to in ss 76(1)(e) and 80(1)(e) of the Act. BY CONSENT THE COURT ORDERS THAT: 5. The First Respondent be restrained, whether by itself, its servants, agents or otherwise howsoever, for a period of three years from the date of this order, from making statements to a person retailing the Humax STBs ("a Humax STB retailer") inducing or attempting to induce a Humax STB retailer not to sell the Humax STBs at a price less than a price specified by the First Respondent. 6. The First Respondent: (a) within three months of the date of this order, establish an education, training and trade practices compliance program ("the Compliance Program") for employees or other persons involved in the First Respondent's business, which is designed to ensure: (i) an awareness of the responsibilities and obligations contained in Parts IV and VIII (including s 48 of Pt IV and s 96 of Pt VIII) and of the responsibilities and obligations in relation to the contravening conduct in this proceeding or any similar or related conduct; and (ii) subject to the Compliance Program being tailored to the First Respondent's circumstances, it be consistent with Australian Standard on Compliance Programs AS3806; (b) within one month of the date of this order appoint a person with experience in trade practices law to advise the First Respondent as to the content of the Compliance Program; (c) implement and administer the Compliance Program for a period of three years from the date it is established; (d) within three months of the date of this order provide a written report to the applicant on the content of the Compliance Program and provide a further report to the applicant on the implementation and administration of the Compliance Program at the conclusion of each period of twelve months during which the program is being implemented and administered. 7. The Second Respondent be restrained for a period of three years from the date of this order from being directly or indirectly knowingly concerned in, or party to, conduct by the First Respondent whereby the First Respondent whether by itself, its servants, agents or otherwise howsoever makes statements to a Humax STB retailer inducing or attempting to induce a Humax STB retailer not to sell the Humax STBs at a price less than a price specified by the First Respondent. 8. The First and Second Respondents pay the Applicant's costs of and incidental to the proceeding in the sum of $18,000, payable by 6 monthly instalments of $3,000 commencing on 24 June 2005 and on the 21st day of each month thereafter. AND THE COURT FURTHER ORDERS THAT: 9. (a) The First Respondent pay to the Commonwealth of Australia a pecuniary penalty in the sum of $150,000 payable by 18 monthly instalments of $8,333.33 commencing on 24 June 2005 and on or before the 21st day of each month thereafter. (b) The Second Respondent pay to the Commonwealth of Australia a pecuniary penalty in the sum of $7,500 payable by 18 monthly instalments of $416.66 commencing on 24 June 2005 and on or before the 21st day of each month thereafter. (c) In the event that there is a default in the making of any of the instalment payments and that default continues for fourteen days, the whole of the outstanding amount is to become due and payable by the party in default. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.