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November 21, 2016
In the build up to “Black Friday”, one of the busiest times of the year for online sales, the CMA is using this opportunity to remind sellers that discussing and agreeing price levels with competitors is illegal and can result in serious penalties.
It goes hand in hand with the CMA writing to a number of online companies who may be denying customers the best available deals and reminding them of their obligations under competition law. The CMA has also engaged with online marketplace providers, which are helping make the CMA’s advice available to online sellers.
This follows the CMA’s recent decision, in one particular case following an 8-month investigation, which imposed a fine of over £160,000 on an online seller of posters and frames, Trod Ltd, for agreeing with a competitor, GB eye Ltd (trading as “GB Posters”), not to undercut each other’s prices when selling on Amazon’s UK website. GB eye escaped a fine by reporting the cartel under the CMA’s leniency programme.
The CMA has produced information that includes an at-a-glance summary for online sellers that explains what constitutes price-fixing and what they can do to avoid it. There is also a case study that provides more detail on how the two sellers in the CMA’s recent investigation ended up breaking competition law.
In the Trod/GB eye case, both companies used automated re-pricing software to implement their agreement not to undercut each other’s prices. In addition, the CMA is warning software providers that they too risk falling foul of competition law if they help their clients use software to facilitate illegal price-fixing agreements, although that was not a feature of the Trod/GB eye case.
The campaign’s key warnings are that online sellers should not:
- agree with their competitors what prices they will charge, or that they won’t undercut each other on price; and
- discuss their pricing intentions or strategies with competitors.
To read the CMA’s press release in full, click here.