The Australian Competition and Consumer Commission is taking legal action against a Melbourne-based Internet café, accusing the operation of being involved in price fixing.
The ACCC claims the business threatened its rival with an aggressive price war.
In what's claimed to be the first legal action of its type against a company in the Internet industry, an ACCC spokesperson said, "we keep a close eye on [price fixing] because it's extremely anti-competitive."
The Commission received a complaint regarding a letter sent by Idle Gossip Internet Services to one of its rival businesses. According to the ACCC, the letter requested that the business agree upon a minimum hourly rate of AU$5 for Internet access, or face more aggressive competition.
"I am aware of the comments [made in the letter], if it did come across aggressively I'm sure it wasn't the intention," a spokesperson from Idle Gossip Internet Services told ZDNet.
According to the Internet café, it was not the business' intention to close its rivals down, which is located directly opposite. Nor, it says, was the letter intended to force the opposition to bump up its prices.
"We've got more superior equipment to them, they were getting quiet [since we opened four weeks ago] so it was partly to help them too."
However, the spokesperson believes that a bit of competition is healthy for all those involved.
"I'm a firm believer that competition is good for business, it's good for consumers and keeps us on our toes."
"We'll face the consequences of our actions, however there was no intention to cause harm on the opposition."
The ACCC has issued legal proceedings against the Internet café, which could face penalties up to AU$500,000 under the Trade Practices Act, which prohibits price fixing between competitors.
"..the ACCC views attempts at price fixing as extremely serious," a statement said.
