The Australian Competition and Consumer Commission has launched legal action alleging illegal price interference against kids toy and clothing company Oobi and its founder Alexandra Riggs.
The Australian Competition and Consumer Commission has launched legal action alleging illegal price interference against kids toy and clothing company Oobi and its founder Alexandra Riggs.
The ACCC claims online retailers supplied by Sydney-based Oobi were told supply would be cut off if they tried to sell the products for less than the price set by company.
Where retailers refused to comply with Oobi’s demands, the ACCC alleges, supply of its products was cut off.
The company even went so far as to include a contractual clause requiring retailers not to sell Oobi products below a specified price in a supply agreement it offered to potential sellers.
The company’s founder, 34-year-old Riggs, has been accused of being “knowingly concerned” in the illegal resale price maintenance the ACCC says was engaged in by Oobi.
The ACCC is seeking potentially significant financial penalties against Oobi and Riggs, as well as injunctions preventing further prohibited conduct and a requirement to notify customers.
Riggs could be hit with a fine of up to $500,000 if the charges are upheld, while the company faces penalties ranging from fines up to $10 million to three times the value of any illgotten gains or 10% of the revenue earned in the preceeding year.
Riggs and Oobi have built a reasonably high profile over the past year, touting celebrity customers such as Cate Blanchett and Naomi Watts.
In a recent newspaper profile Riggs said “people want to see you succeed and small businesses help each other. But you do have to wear your heart on your sleeve.”
She also offered this advice to new business owners: “You have to take risks and will probably make mistakes, but that’s the only way to succeed.”
Riggs told SmartCompany she is “devastated” by the legal action but declined to comment further while proceedings are ongoing.
Read more on breaches of the Trade Practices Act
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