Significance for client

Tooltechnic is an importer and wholesaler of premium power tools, including Festool and Fein power tools, accessories and consumables. Tooltechnic distributes these power tools through 366 specialist dealers across Australia, and had been engaging in RPM conduct for its Festool branded power tools since it was granted ACCC authorisation in December 2014. (MinterEllison assisted with this first ever authorisation at the time).

This RPM notification for Tooltechnic's Festool branded power tools, as well as its Fein branded power tools, gives Tooltechnic legal protection to impose a minimum price for the retail sale of these tools.

Feedback from dealers suggested that setting a guaranteed minimum price for these products gave a large network of Festool/Fein dealers the certainty needed to invest in facilities and staff to provide better levels of pre- and post-sales retail services. This resulted in consumers being able to make more informed decisions about the purchase and maintenance of these relatively complex products. The ACCC agreed this may result in increased service-based competition between Festool/Fein power tool dealers (particularly enabling smaller dealers to better compete with larger dealers) and promote inter-brand competition. Further, any detriment is likely to be limited by the fact that Festool and Fein have relatively low market shares and face numerous competitors.

Future for RPM notifications

The notification sets the scene for the way the ACCC will look at RPM notifications in Australia. Not surprisingly, the ACCC has made it clear that 'it should not be assumed that because it has allowed this notification to stand the ACCC will not object to future notifications for RPM." The ACCC will look closely at any future notification of RPM conduct and the characteristics of the product/service and the industry will be relevant to this assessment. Substantial evidence and information will be needed to demonstrate that there will be clear public benefits and limited detriments from the conduct in order for notifications to succeed.

The MinterEllison team was led by Geoff Carter (Partner), Noelia Boscana (Partner) and Natasha Simonds (Lawyer).