The Commerce Commission today issued a statement on preliminary issues regarding a recent application to HP New Zealand’s Watchdog. Last month’s HP Apply for permission to engage in Resale Price Maintenance (RPM) In connection with the proposed arrangements for the HP Online Store and future HP Online Marketplace Stores.
In that statement, the Commerce Commission outlined key competitive issues that Watchdog considers essential in deciding whether to allow HPNZ’s proposed RPM arrangement.
The Commission began by mentioning that RPM arrangements occur when a supplier (HP in this case) enforces a minimum retail price at which a reseller must sell a particular item. Therefore, RPM can prevent resellers from setting their own prices and increase consumer prices.
The Commission said:[RPM] Is a form of anti-competitive behavior and is illegal under commercial law unless approved by the Commission. “
Watchdogs only allow RPMs if they result in “benefits to the general public.” In making a decision, the Commerce Commission must decide whether the act will:
- Raise or lower the price
- Improve or worsen quality
- Improve or worsen the production process
- Supports or interferes with product or process innovation.
“Our decision on granting approval is communicated by a movement that balances quantitative and qualitative benefits and disadvantages,” the Commission said.
“After assessing the value of the benefits and disadvantages, we will grant approval if we are convinced that the benefits of the agreement are likely to outweigh the disadvantages. If we are not satisfied, we will not grant approval.”
In a preliminary issue statement, the Commission also clarified HP’s reasons for why RPM arrangements should be approved. HP submitted in its application that RPM “does not cause any damage and therefore even the slightest public interest justifies the authorization.”
Vendors also said they expect the impact on the supply chain to be limited, distributors and resellers will be unaffected as well, and many key competitors will remain on the market.
HP also assumed that this measure would bring some benefits to customers, including:
- Improving the user experience for customers of HP stores, especially HP online stores
- Wide range of payment options to enhance customer selection for HP online store customers
- Fast delivery to HP store customers
- A wide range of delivery options for HP store customers.
In a statement, the Commerce Commission said, “We will consider whether the proposed action could affect competition and bring benefits or disadvantages.”
“For example, evaluate how that action affects competition between HP product resellers, and whether it could affect competition between HP products and rival brands. I will. “
Watchdog said HP’s application decisions will be made by September 10th this year.
The Commerce Commission outlines competitive issues regarding HPNZ’s recent submissions.
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