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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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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Introduction Contd...

RPM is a practice where a manufacturer and its distributors agree that the latter will sell the manufacturer's products at certain prices, at or above a benchmarked price.

This was illegal in some countries such as Australia. In late December 2007 Federal Judge Peter Jacobson (Jacobson), found Navman Australia guilty and fined the company A$1.25 million. Baird and King were fined A$80,000 and A$40,000 respectively.

In his judgment, Jacobson denounced Navman Australia's actions and said, "The details of the contraventions show that Navman's conduct was not merely deliberate.

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It was pursued in an aggressive and high-handed way by the company's most senior managers."7

He vehemently criticized Navman's corporate culture and the fact that the company had failed to adequately provide basic legal training to its managerial executives. Analysts also said that the behavior of Navman Australia had hampered the price competition in the Portable Navigational Devices (PND) market of Australia during that period.

Analysts said that the Australian Competition and Consumer Commission (ACCC) had a record of imposing huge reparation fines on companies which tried to stifle prices and market competition as Australian law did not allow retailers to be discouraged from discounting prices...

Excerpts >>


7] James Wells, "Navman Fined $1.36 Million for Price Fixing,"www.current.com.

 

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