{"id":71537,"date":"2016-06-21T10:06:09","date_gmt":"2016-06-21T10:06:09","guid":{"rendered":"http:\/\/mostafa.openonline.co.uk\/?guid=6283c437abe68acce4c4639bd150d572"},"modified":"2016-06-21T10:06:09","modified_gmt":"2016-06-21T10:06:09","slug":"press-release-cma-guides-businesses-on-online-competition-law","status":"publish","type":"post","link":"https:\/\/mostafa.openonline.co.uk\/?p=71537","title":{"rendered":"Press release: CMA guides businesses on online competition law"},"content":{"rendered":"
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The Competition and Markets Authority\u2019s (CMA<\/abbr>) open letter<\/a> is accompanied by an at-a-glance guide<\/a> to the law and follows 2 recent cases<\/a> in which businesses were fined a combined total of more than \u00a33 million for engaging in resale price maintenance (RPM<\/abbr>).<\/p>\n

RPM<\/abbr> occurs when a supplier and a retailer agree that the retailer will not resell or advertise the supplier\u2019s products below a specified price. RPM<\/abbr> can also be achieved indirectly, for example as a result of restrictions on discounting or where there are threats or financial incentives to sell at a particular price. Merely setting a \u2018recommended\u2019 retail price is not, however, against the law, provided that there are no attempts to enforce compliance with the recommended retail price. RPM<\/abbr> agreements are usually illegal as they can prevent retailers from being able to offer lower prices to attract customers, or to sell off surplus stock. The CMA<\/abbr> has produced a short video<\/a> to explain what RPM<\/abbr> looks like in practice.<\/p>\n

This is a particularly important issue as online sales channels develop, with restrictions on discounting for internet sales capable of being illegal RPM<\/abbr>.<\/p>\n

In the 2 cases earlier this year, Ultra Finishing Ltd<\/a>, a supplier of bathroom fittings, and ITW Ltd<\/a>, a supplier of commercial fridges, were fined for engaging in RPM<\/abbr> by restricting retailers\u2019 ability to sell their products online at independently determined prices.<\/p>\n

The CMA<\/abbr>\u2019s research shows that businesses\u2019 understanding of RPM<\/abbr> is low; about one-third of the businesses surveyed incorrectly thought it was legal to set the price at which other businesses can resell their product, with another 37% uncertain on the rules. Only 29% correctly responded that \u201cit is unlawful to set the price at which others can resell your products\u201d.<\/p>\n

The open letter gives details of different kinds of RPM<\/abbr> that can break the law, including the use of \u2018minimum internet advertised price\u2019 policies. It also warns that both suppliers and retailers can be fined for engaging in RPM<\/abbr>. The CMA<\/abbr>\u2019s letter makes it clear that the internet is an increasingly important channel for competition because it opens up markets, provides customers with more choice and enhances price competition.<\/p>\n

Ann Pope, CMA<\/abbr> Senior Director, said:<\/p>\n

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Price competition from online sales is usually intense, given the ease of searching on the internet. RPM<\/abbr>, by preventing retailers from offering discounted prices, denies buyers the benefit of the lower prices and increased quality that comes from genuine competition.<\/p>\n

The CMA<\/abbr> is strongly focused on enforcing competition law to ensure that digital and online markets are working as they should be, across all sectors, for the benefit of consumers.<\/p>\n

The CMA<\/abbr> is issuing this advice so that all businesses know what to look out for when dealing with the supply and retail of products, whether this is online or via traditional \u2018bricks and mortar\u2019 stores.<\/p>\n<\/blockquote>\n

Michael Weedon, of the British Independent Retailers Association, said:<\/p>\n

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Imbalances in strength between suppliers and retailers can foster conditions where resale price maintenance can occur. All participants in the supply chain need to understand the law, so we welcome these materials, which will help retailers gain clarity on their rights and obligations around pricing restrictions.<\/p>\n<\/blockquote>\n

The consequences for businesses that break competition law can be very serious, including fines of up to 10% of worldwide turnover.<\/p>\n

In addition to the new publications, the CMA<\/abbr> has produced a series of animated videos<\/a> explaining the main principles of competition law and how they affect small businesses.<\/p>\n

Notes for editors<\/h3>\n
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  1. The CMA<\/abbr> is the UK\u2019s primary competition and consumer authority. It is an independent non-ministerial government department with responsibility for carrying out investigations into mergers, markets and the regulated industries and enforcing competition and consumer law. For more information on the CMA<\/abbr> see our homepage<\/a> or follow us on Twitter @CMAgovuk<\/a>, Flickr<\/a> and LinkedIn<\/a>.<\/li>\n
  2. A business involved in anti-competitive behaviour may be able to apply for leniency and receive a reduced fine or avoid a fine altogether by coming forward to the CMA<\/abbr>. See the CMA<\/abbr>\u2019s guidance<\/a> for more information about how to apply for leniency as well as leniency benefits, eligibility and conditions. Concerns about anti-competitive behaviour can be raised through completing our online form<\/a> or by calling 020 3738 6000.<\/li>\n
  3. Enquiries should be directed to Simon Belgard (simon.belgard@cma.gsi.gov.uk<\/a>, 020 3738 6472).<\/li>\n<\/ol>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

    The CMA has written an open letter to businesses alerting them that, if suppliers restrict their retailers\u2019 prices, that can break the law.<\/p>\n","protected":false},"author":8,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[13],"tags":[],"_links":{"self":[{"href":"https:\/\/mostafa.openonline.co.uk\/index.php?rest_route=\/wp\/v2\/posts\/71537"}],"collection":[{"href":"https:\/\/mostafa.openonline.co.uk\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mostafa.openonline.co.uk\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mostafa.openonline.co.uk\/index.php?rest_route=\/wp\/v2\/users\/8"}],"replies":[{"embeddable":true,"href":"https:\/\/mostafa.openonline.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=71537"}],"version-history":[{"count":0,"href":"https:\/\/mostafa.openonline.co.uk\/index.php?rest_route=\/wp\/v2\/posts\/71537\/revisions"}],"wp:attachment":[{"href":"https:\/\/mostafa.openonline.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=71537"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mostafa.openonline.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=71537"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mostafa.openonline.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=71537"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}