Canon admits breach of Commerce Act
31 August 1995
Canon New Zealand Limited has admitted breaching the Commerce Act by trying to prevent Edge Computers discounting printers.
Commerce Commission Chairman Dr Alan Bollard said Canon has signed a settlement with the Commission, admitting it broke the law and undertaking to do nothing else which might breach the Act in future and to set up a compliance programme to ensure its staff understand what is required of them under the Act.
Canon's dealer agreement stated that Edge Computers could not sell Canon bubble jet printers for less than the price dictated by Canon.
Despite the agreement, Edge Computers sold the printers for less than the required price. Canon warned it that if it continued discounting it would lose its dealership.
Edge Computers did continue discounting and Canon wrote to the company saying it was ending its dealership because it had sold printers at below the approved price.
Dr Bollard said that setting a minimum price for which goods can be resold by another business is called resale price maintenance and is prohibited by the Commerce Act.
"It is a form of price fixing, and all price fixing is a concern because it reduces or eliminates competition and prevents customer choice influencing prices," he said.
"The Commission will take whatever action is appropriate to stop anyone engaging in resale price maintenance or other forms of price fixing in any markets."
In this case the Commission accepted a settlement including an admission that Canon broke the law as an alternative to taking court action.
It took into account that it was an isolated event that occurred in relation to one distributor and appeared to be an unintentional breach of the Act. Canon voluntarily resupplied Edge Computers and co-operated with the Commission during its investigation.
Media contact:Communications Officer, Vincent Cholewa
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