Section 48 of the Competition and Consumer Act 2010 (Cth) (CCA) prohibits conduct known as resale price maintenance.

Resale price maintenance occurs where a supplier of goods or services insists that a reseller of those goods or services sells them at, or above a specified minimum price. The prohibition is on setting a minimum, or floor price above which a reseller must sell. The setting of a maximum price or a recommended price is permissible but great care must be taken to ensure that the maximum or recommended prices are not, in fact, the only price, or understood by the reseller as the only price at which goods or services must be sold. If that is the case, the price will be both a maximum and a minimum price and the prohibition will be triggered.

While s 48 contains the prohibition it is Pt VIII of the CCA which contains the provisions for the operation of s 48 . Section 48 must be read in conjunction with Part VIII .

The prohibition is relevant to any relationship in which there is supply of goods and services by one party to another for resale purposes. This includes relationships between wholesaler and retailer, wholesaler and distributor, distributor and retailer.

The prohibition in s 48 is absolute, regardless of whether it has the purpose, or has or is likely to have the effect of substantially lessening competition in a relevant market. While resale price maintenance is absolutely prohibited, s 88 of the CCA empowers the ACCC to authorise such conduct where it is satisfied that the anti-competitive detriment of the conduct is outweighed by its public benefits.

See The general prohibition.

Section 96 of the CCA, found in Pt VIII of the CCA, provides that a corporation (referred to as the supplier) engages in the practice of resale price maintenance if that corporation does an act referred to in any of the paragraphs of subs (3). That subsection defines the term “resale price maintenance” by reference to particular types of conduct engaged in by a supplier. It refers to the conduct of the supplier towards a “second person” — the term “reseller” can be substituted for “second person” in the subsection as the conduct must be directed towards a reseller of the supplier’s goods or services. The section also applies to the supply of services by reason of the operation of s 96A .

See Acts constituting engaging in resale price maintenance.

Section 97 of the CCA provides that a supplier will not be taken to have engaged in resale price maintenance if all that the supplier does is:

• put a label on goods stating the words “recommended price” and the price (s 97(a), CCA); and/or

• advise the reseller of the price that the supplier recommends in relation to the sale of the goods or services on each occasion he or she does so, and also makes a statement to the following effect — “the price set out or referred to herein is a recommended price only and there is no obligation to comply with the recommendation” (s 97(b), CCA).

See Recommended prices.

The withholding of supply from a reseller because he or she has sold goods or services below a specified minimum price, or because he or she won’t agree not to do so, also amounts to resale price maintenance. Section 98(1) sets out the situations in which withholding supply in such a situation will amount to resale price maintenance. It includes situations of outright refusal to supply, as well as supply on disadvantageous terms, treating a reseller less favourably and causing or procuring others not to supply goods or services to the reseller.

The withholding of supply to a reseller will not amount to resale price maintenance where the reseller has, within the preceding year, sold goods or services obtained, directly or indirectly, from the supplier at less than their cost:

• for the purpose of attracting to the establishment at which the goods or services were sold persons likely to purchase other goods (s 98(2)(a), CCA ); or

• otherwise for the purpose of promoting the business of that other person (s 98(2)(b) , CCA).

However, withholding of supply in such circumstances where there is a genuine seasonal or clearance sale of goods or services that were not acquired for the purpose of being sold at that sale (s 98(3)(a) , CCA) or a sale of goods or services that took place with the consent of the supplier (s 98(3)(b) , CCA) will amount to resale price maintenance.

See Withholding supply.

Section 99 of the CCA sets out the situations in which a statement will be deemed by a supplier to have been used in connection with goods and services. They are where:

• a statement is applied to goods, whether by being woven in, impressed on, worked into or annexed or affixed to the goods or otherwise (s 99(1)(a) , CCA);

• a statement is applied to a covering, label, reel or thing in or with which goods are supplied (s 99(1)(b) , CCA); or

• a statement is used in a sign, advertisement, invoice, catalogue, business letter, business paper, price list or other document or otherwise in a manner likely to lead to the belief that it refers to goods (s 99(1)(c) , CCA).

Section 100 of the CCA has the effect of reversing the onus of proof in certain circumstances in relation to resale price maintenance actions.

See Evidentiary provisions.