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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"There is only one issue that will stop Navman and that's discounting! I will not allow our great products to be prostituted - take the warning now!"1

- Christopher Baird, general manager, Navman's marine division, and a director of Navman Australia Pty Ltd., Navman, in an email to its marine products dealers, in 2002.

"Businesses must be free to sell their products at prices below suppliers' recommended retail prices… Price competition is fundamental to competitive markets and this behavior does nothing but fetter this competitive process."2

- Graeme Samuel, Chairman, Australian Competition and Consumer Commission
(ACCC) 3 in December 2007.

"Navman's corporate culture was not conducive to compliance with the Act... I would have thought the senior managers of a multi-national company would have, at very least, a basic understanding of the law even without the need for detailed training. In any event, the failure of the company to provide training and see that its senior managers arranged training for their subordinates reflects badly on Navman's corporate culture."4

- Peter Jacobson, Federal Court Judge, Sydney, in December 2007.

Introduction

On December 11, 2006, a case was filed in the Federal Court, Sydney, against Navman Australia Pty Ltd5, the Australian arm of New Zealand-based navigation equipment manufacturer Navman NZ Limited (Navman), and two of its employees, former general manager Christopher Baird (Baird) and former Australasian sales manager, David King (King), alleging that Navman Australia had breached Section 48 of the Trade Practices Act of 1974.

After a series of proceedings and adjournments, the company and the two key employees were found guilty of engaging in Resale Price Maintenance (RPM).

Navman: The Resale Price Maintenance Controversy - Next Page>>

1] Peter Griffin, "Satnav Firm Gets $1.4m Fine for Price-fixing,"www.nzherald.co.nz, December 28, 2007.

2] "Navman Slapped with $1.4m Fine in Australia,"www.stuff.co.nz, December 28, 2007.

3] Australian Competition and Consumer Commission (ACCC) is an independent body formed by the Government of Australia which protects consumer rights and business rights and obligations, performs industry regulation and price monitoring, and prevents illegal anti-competitive behavior in the industry.

4] http://www.wisewoulds.com.au/publications/newsletters/distribution/december07january08.
htm

5] As of 2007, Navman Australia Pty Ltd. operated as AusHoldco Pty Limited.


  

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