Wednesday 25 May 2016

CMA fines refrigerator supplier for price maintenance



The Competition and Markets Authority (CMA) has fined fridge supplier ITW Ltd over £2 million for breaching competition law by restricting dealers from offering online discounts.  The decision confirms the CMA’s focus on tackling competition law breaches in the e-commerce sector.
The CMA issued a statement of objections to ITW in January 2016 and at that time also issued objections against bathroom suppliers for similar practices.  Last month the CMA imposed a £826,000 fine on the bathroom suppliers.
ITW admitted that its fridge business unit Foster Refrigeration was involved in resale price maintenance in the online sales of commercial refrigerators between 2012 and 2014.  According to the CMA, Foster Refrigeration set minimum price floors and sanctions if the dealers failed to comply including cutting off supplies or charging them higher prices for fridges.
The fine imposed on Foster reflects a 10 per cent reduction due to ITW agreeing to set up a compliance programme and a 20 per cent reduction for the company’s cooperation with the CMA’s investigation.
The CMA has stated that it has warned 20 other commercial catering businesses that they may have been involved in similar restrictive practices relating to online sales.  It appears that these warnings have been sent to dealers who may have agreed to the restrictions and not only to the suppliers imposing them.  The fact that the CMA has not fined the dealers in these cases may suggest that if similar practices occur in the future, dealers may not get off as lightly.

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