Navman: The Resale Price Maintenance Controversy


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Case Details:

Case Code : BECG084
Case Length : 10 Pages
Period : 2004-2008
Pub Date : 2008
Teaching Note :Not Available
Organization : Navman
Industry : Consumer Electronics
Countries : Australia

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Please note:

This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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Excerpts

Background Note

Navman was founded in the year 1986 by Peter Maire (Maire) in New Zealand. Maire entered the marine market when he set up a sea equipment manufacturing business in a small garage in Auckland. He named this start-up enterprise Talon Technology...

The 'Resale Price Maintenance' Issue

In December 2006, before the acquisition by MiTAC, Navman found itself mired in a new set of problems with allegations being leveled against it by the Australian Competition and Consumer Commission (ACCC). Navman operated in Australia as Navman Australia Pty Ltd. (Navman Australia) with dealership and retail arrangements.

ACCC alleged that Navman and two senior executives Baird and King had been engaged in resale price maintenance (RPM)...

The Law and the Practice of RPM

In Australia, the Australian Competition and Consumer Commission (ACCC) keeps an eye on the RPM practices under the Trade Practices Act of 1974. Section 48 of the Trade Practices Act of 1974 states, "a corporation or a person shall not engage in the practice of Resale Price Maintenance."...

Navman Pays the Penalty

After a series of proceedings and adjournments, in late December 2007, Federal Judge Jacobson upheld the fine of A$1.25 million on Navman, while Baird and King were fined A$80,000 and A$40,000 respectively...

Outlook

As of early 2008, Navman had put the incident behind it. Navman's spokesperson said, "Ownership has now been transferred, splitting the management of marine, in-car, and other navigation systems."The company was gearing up to take advantage of its association with MiTAC...

Exhibits

Exhibit I: Navman's Logo
Exhibit II: Navman's Business Divisions


 

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