CMA warns of price fixing as it fines NLC £2.7m
The lighting industry has been told by the Competition and Markets Authority that it suspects suppliers are engaging in resale price maintenance.
It has written warning letters to a number of lighting suppliers ‘where there are reasonable grounds to suspect they may be engaging in RPM.’
The move follows a fine of £2.7m for Endon and Saxby brand owner National Lighting Company for imposing a minimum price on online sellers, who then had to retail goods at, or above, this price.
NLC tried to avoid detection by not committing agreements to writing. The fine includes an extra penalty because the company ignored an earlier warning letter from the CMA. A warning letter may be sent when the CMA has reasonable grounds to suspect anti-competitive behaviour. It is not a formal allegation but must be taken seriously and requires a considered response.
‘This decision should act as a warning to companies that resale price maintenance is illegal and that warning letters issued by the CMA are to be taken seriously and not to be ignored. The digital economy is booming and with so many businesses operating online it is vital that fair competition is maintained across all sectors. The CMA wants to ensure consumers get a fair price and a good deal. That can only happen when retailers are free to set their own prices,’ said Ann Pope, CMA senior director, antitrust.
While NLC’s fine was increased for ignoring the CMA’s warning letter, it also benefited from a 30% reduction to the fine because it applied for and was granted leniency. An additional 20% reduction was applied because NLC voluntarily entered into settlement with the CMA. The fine also included a small reduction as a result of NLC agreeing to implement a comprehensive compliance programme.
The CMA also has the power to fine retailers who enter into RPM agreements with suppliers.