The Commerce Commission has authorised HP New Zealand to engage in resale price maintenance (RPM) in its proposed HP online stores and marketplace stores for five years.
HP New Zealand, which crashed through the $400 million revenue barrier earlier this year, applied for authorisation to engage in RPM in relation to its online stores in March in an effort to improve customers' online experience of its brand and product range.
The company requested authorisation to specify the prices for which its third-party distributor, Ingram Micro, would sell HP products to consumers through the stores.
“After consulting on its draft determination, the commission considers that the HP stores are likely to provide many of the customer-experience benefits claimed by HP, while the RPM for which HP seeks authorisation is unlikely to cause any detriments," said ComCom chair Anna Rawlings.
"Further, the RPM will only apply to products sold through the HP stores.”
The competition regulator therefore reached the view that authorising RPM in this case was likely to lead to a net public benefit.
HP's country manager, Oliver Hill, told Reseller News this morning the determination was a big step in HP New Zealand's journey.
"We've been really focused on improving the customer experience with our online presence for some time," he said.
"Being able to actually have what will be a fantastic user interface to interact with our brand is a really big milestone."
Hill said the earlier online experiences HP had provided were not adequate and they would have to go to partner website or even to that of another vendor.
Now there would be one place where customers could experience the brand and look at the product options. They could then either decide to purchase there or, as happened a lot of the time, go to a partner to buy and collect.
"So many people do their research online but with the purchase the size of a HP purchase they normally want to see the product," Hill said.
HP Australia already operates under a similar regime but New Zealand's requirements were somewhat more stringent with more hurdles to go through, Hill said.
Hill said he was not aware of any objections to HP New Zealand's application while partners were aware of how well the similar arrangement in Australia had worked for the channel.
He conceded that perhaps under lockdown conditions buying behaviour among consumers might change. The business market, meanwhile, was serviced completely differently through partners.
"Those partners that have worked with HP for decades know the channel is in our DNA," Hill said. "Our default is partners and that is not going to change."
The commission may grant authorisation under the Commerce Act for certain arrangements that may otherwise breach the Commerce Act, if it is satisfied that the public benefits of the arrangements outweigh the detriments arising from the loss of competition.
The grant of an authorisation protects the applicant from court action under the Commerce Act by the commission and private individuals.