1. Brooke and Stephanie are both in the clothing business and they have competed vigorously with each other for many years. They each have large wholesale warehouses from which they sell and distribute their clothing to retailers. However, following an unusual chain of events, they agree to set aside their differences and work more collaboratively. Brooke and Stephanie believe that they could both improve their profit margins if they were to show each other their price lists before sending out each new season's line, agreeing to charge the same price for comparable items on the lists. They do not put the agreement into writing but each of them sticks to it over the following months.

Brooke and Stephanie both belong to the 'Association of High Fashion Houses'. Most of the clothing manufacturers in their area are members of the Association. At a meeting of the Association the members decide that none of them will continue to deal with a particular fabric supplier named Fabulous Fabrics Ltd as this supplier charges the highest prices. The members consider that this will be a good way to drive down the prices charged by other suppliers.

Brooke is getting dissatisfied with the progress of her business and decides to take some additional measures to ensure its success. Her brand of clothing is quite popular, so she decides to get all the stores that stock her clothes to agree that they will only stock her label and not those of any other clothing manufacturers. Further she wants to introduce a system of minimum retail prices for her clothes and plans to cut off supply to any retailers who sell the product below that price.

Meanwhile, Stephanie has adopted a different approach to improving her business and has decided to cut her prices so low that other clothes manufacturers will not be able to compete with her, in the hope that the competitors will eventually go out of business. Stephanie's business has a very large share of the market and she feels confident that although the lower prices will mean she will be trading at a loss for a period of time, she should be able to more than make up the difference when the other traders (including Brooke) have dropped out of the market.

1. Identify all actions taken by Brooke and Stephanie that are in contravention of Part IV of the Competition and Consumer Act 2010 (Cth).
2. What are the maximum penalties that could be imposed on Brooke and Stephanie for each offence?

1. John buys the organic tomatoes used in his restaurant from OrganicVeg Supplies Ltd. When John complains to OrganicVeg Supplies about a recent price increase, OrganicVeg Supplies offers John a special deal: John will only have to pay $6 per kilo for organic tomatoes for the next 12 months, but he must commit to buying all of his organic fruit from Chrome Farms. OrganicVeg Supplies does not receive any commission from the Chrome sales, and John is the only restaurant owner to be given such an arrangement.

1. Is this arrangement prohibited by Part IV of the CCA? Why and Why not?
2. Would your answer be different if the arrangement was that John would buy all of his organic fruit from OrganicVeg Supplies?
3. If either arrangement is prohibited, could authorisation be sought from the ACCC? How?