21/06/2017

A company that imposed a minimum online price on the retailers who sold its products on to consumers has been fined £2.7m after an investigation by the Competition and Markets Authority found it guilty of ‘resale price maintenance’ in breach of competition law. 

‘Decision of the Competition and Markets Authority: Online resale price maintenance in the light fittings sector: Case 50343’ explains how the fine included an extra penalty because the company involved – National Lighting Company – had ignored an earlier warning letter sent by CMA because it had ‘reasonable grounds to suspect anti-competitive behaviour’.

‘Restricting online resale prices: CMA letter to suppliers and retailers’ gives detail on the different kinds of practices that can amount to RPM, including the use of ‘minimum advertised price’ or MAP policies. It also warns both suppliers and retailers that they can face serious consequences for engaging in illegal RPM.

Such letters are not formal allegations but must be taken seriously and require a considered response. The CMA subsequently sent similar letters to other suppliers in the light fitting sector because there were reasonable grounds for suspecting they may also be engaging in RPM.

To help stamp out RPM, it has also re-issued advice to businesses that includes a film on RPM and case studies, as well as the open letter.