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.
CMA press
release 24 May 2016: https://www.gov.uk/government/news/fridge-supplier-fined-22-million-for-restricting-online-discounts
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