The Competition and Markets Authority receives more complaints about price fixing than any other infringement of competition law, says its senior director of antitrust Ann Pope – and it will not hesitate to clamp down on offenders

As the cost of living rises, it is more crucial than ever to clamp down on practices that may stop shoppers from finding good deals online for some products.

We know that some suppliers require retailers to sell their products at, or above, a set price. This means shoppers lose out. No matter how much they look around, they always find the same price and they could end up paying more than they should. 

Suppliers and retailers that engage in this kind of vertical price fixing – also known as resale price maintenance (RPM) – are breaking the law. 

“The CMA can launch a formal investigation without any prior warning. Businesses should not wait for a warning before they consider changing their practices”

The Competition and Markets Authority (CMA) receives more complaints about RPM than any other infringement of competition law and the growth of ecommerce has resulted in an increasing proportion of complaints about this type of online price fixing. 

When we find evidence of RPM, the CMA can take action to protect not only shoppers but also the majority of businesses that play by the rules. 

Our actions can range from sending warning or advisory letters to launching a full- blown investigation, with firms that break the law being on the receiving end of large fines.

Protecting online competition

Competition between retailers – both online and in-store – is intensified when they can sell or advertise products at discounted prices online because customers can easily compare prices and chose the best deal. It is important for the CMA to protect customers by uncovering and tackling RPM, which prevents consumers from saving money. 

To make firms think twice before entering into RPM arrangements, the CMA has developed an online price monitoring tool to help detect wrongdoing. We have also issued millions of pounds worth of fines to firms found to have broken the law in sectors like bathroom fittings, commercial refrigeration, lighting and musical instruments. 

Most recently, we fined Dar Lighting £1.5m for restricting retailers’ freedom to set their own prices online. Dar’s penalty was increased by a record 35% after it ignored two warnings from the CMA.

This kind of action leads to tangible benefits for shoppers. An independent report found the CMA’s decisions condemning of RPM in the bathroom fittings and light fittings sectors led to an estimated fall in prices of around 17%.

Know the rules, report concerns

Firms must always take warning and advisory letters seriously – but it is also important to remember the CMA can launch a formal investigation without any prior warning. Businesses should not wait for a warning or advisory letter from the CMA before they consider changing their practices.

Because prevention is better than a cure, we have provided guidance and advice to businesses of all sizes so they can operate with confidence, safe in the knowledge they are not breaking the law.

We encourage suppliers and retailers to review their practices regularly and report anti-competitive behaviour to us directly through our cartels hotline or online.

There is also still a route for firms to go down if they believe they have been involved in RPM – they should consider telling us and may be protected from significant penalties, provided certain conditions are met, under the CMA cartel leniency policy.

By improving businesses’ understanding of the law and clamping down on the minority of firms who refuse to abide by it, we can make sure shoppers do not pay over the odds at a time when many are already feeling the pinch.

Ann Poper is senior director of antitrust at the Competition and Markets Authority

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