Companies, particularly large and dominant enterprises, must avoid doing anything classed as anti-competitive. Competition law sets out what practices would be deemed to be anti-competitive and the consequences of such activities.
Anti-competitive activities can present themselves in the dividing up of markets, bid rigging and discussing tenders and price fixing.
Competition can be a very complex area of law and we are one of the few firms in the North West that specialise in this area. We assist companies who believe there to be unfair dealings and trading, as well as companies wishing to defend such actions.
Our expertise extends to advising clients on a national scale, dealing with actions through the Court system and also progressing matters through Governmental Regulatory bodies, such as the Competition and Markets Authority (CMA).
If you have experienced a situation where you believe there has been an anti-competitive arrangement, such as price fixing, our team will be able to provide legal advice and assistance.
Price Fixing/Resale Price Maintenance
Price fixing is one of the most serious infringements of competition law.
Most people will be aware of what constitutes straight-forward price fixing, where two or more entities collectively agree to fix the price for particular goods or services. However, not all price fixing agreements are quite so obvious and indirect attempts to fix prices are no less serious.
As a general rule of thumb, undertakings must be free to choose the price at which they sell goods or services. Anything which interferes with or hinders an undertaking’s independence in setting its selling price is likely to give rise to competition issues.
Common examples of indirect price fixing include:
- Agreeing the level of discounts;
- Stipulating a “basic” or minimum price to be achieved;
- The imposition of an obligation not to sell below cost price – if a third party wants to sell at loss, the law says “so be it”. Sales below cost price will only be a cause for concern where the party selling at a loss holds a dominant position (in which case sales below costs price could amount to predatory pricing);
- The exchange of information which allows competitors to adjust their pricing behaviour as a result, for example the exchange of information concerning future pricing intentions;
- Dual pricing whereby a suppliers charges a distributor a higher price for products intended to be resold online than products intended to be sold in a bricks & mortar outlet (unless such a restriction can be justified);
- Recommended or maximum resale prices are acceptable provided they are truly “recommended”. However, if steps are taken to try and enforce a recommended price, for example by way of sanctions or penalties if an entity deviates from the recommendation, it is likely to fall foul of the competition regime.