National competition authorities continue to crack down on resale price maintenance

Written on 7 Oct 2015

National competition authorities continue to impose fines against manufacturers that attempt to dictate the resale price of their products.

In two cases the fines (unusually) also extend to retailers for their part in co-ordination of the retail price. This reflects the active participation of these retailers in the retail price maintenance activity. A trade association has also recently been sanctioned for circulating pricing recommendations between its members.

The cases highlight that companies and organizations (including retailers and trade associations) engaging in resale price maintenance activity can continue to expect active enforcement and sanctions form national competition authorities.

Portable navigation devices (Germany) – May 2015 

The Bundeskartellamt (BKA) levied fines of €300,000 on portable SatNav manufacturer, United Navigation GmbH. United Navigation enforced minimum retail prices by monitoring the online retail prices of its customers. Non-compliant customers were contacted and, in some cases, threated with withdrawal of supplies. 

Commenting on the case, Andreas Mundt, President of the BKA, reiterated the (well- established) prohibition on RPM agreements: 

“Retailers are free to set the price they want for a product. Manufacturers cannot stop them from doing this. They can only make a non-binding price recommendation.”

 Sports equipment (Denmark) – May 2015 

ActionSportGames was fined €42,666 for restricting the resale price applied by its customers on the resale of handball sports equipment. 

Food (Lithuania) – May 2015

The Lithuanian appeal court upheld fines imposed by the Lithuanian competition authority for agreements between supplier Maxima LT and its customer Magenta to maintain retail price for Maxima’s frozen pastry and bread products. The agreements covered a period of 10 years. Maxima LT was fined €16.8m and Mantinga €4.4m. 

Food and pet food (Germany) – June 2015 

The Federal Cartel Office imposed fines of €151.6m for resale price maintenance co-ordination between manufacturers of food and pet food in Germany. 

The case is unusual because the retailers were actively involved in maintaining the prices, coercing the manufacturers to apply RPM provision on other retails. The fines were therefore imposed on both the manufacturers and retailers involved. 

Related probes into confectionary, beer and coffee prices continue. 

Bakery products (Finland) – August 2015

The Finnish competition authority imposed fines of €55,000 on the Finnish Bakery Federation for recommendations to its members to raise prices in response to the industry’ weak profitability.

Sunglasses (France) 

During the period May – July, the French competition authority issued formal statements of objection, relating to pricing and other sale practices, to various retailers of sunglasses. The targets include Luxottica (whose brands include Ray Ban, Oakley and Vogue eyewear) and Safilo (whose brands include Armani, Hugo Boss and Dior).

Cinema RPM via discounting practices (Lithuania) 

The Lithuanian competition authority has sent a statement of objections to cinema operators and film distributors for discounting policies that have the effect of maintaining retail prices. Further details are awaited.

Update 26 October 2015

The German competition authority recently imposed a fine of EUR 15.5 million on mattress maker Tempur for resale price maintenance and restricting online trade. Tempur threatened its retailers that it would cut supplies to any distributor offering significant discounts, especially on the internet. The decision highlights that the German enforcers will not allow brand-name manufacturers to impose pressure on their retailers when it comes to their ability to determine their resale price, or selling via the internet.