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Latest Issue: Sept/Oct 17

Lighting company fined £2.7 million for restricting online prices

The National Lighting Company (NLC) supplies light fittings to a range of retailers who then sell them on. After a detailed investigation, the Competition and Markets Authority (CMA) found it imposed a minimum price on online sellers, who then had to retail goods at, or above, this price.

This kind of illegal practice, known as resale price maintenance (RPM), means customers miss out on the best possible prices and cannot shop around for a better deal on that supplier’s products.

NLC, which tried to avoid detection by not committing agreements to writing, has been fined £2.7 million for breaking competition law. The fine covers violations in relation to its Endon and Saxby brands and includes an extra penalty because the company ignored an earlier warning letter from theCMA. A warning letter may be sent when theCMAhas reasonable grounds to suspect anti-competitive behaviour. It is not a formal allegation but must be taken seriously and requires a considered response.

TheCMAhas today sent a number of warning letters to other suppliers in the light fittings sector where there are reasonable grounds to suspect they may also be engaging inRPM.

To help stamp out resale price maintenance, theCMAhas also today re-issued its advice to help businesses stay on the right side of the law. This includes anopen letteronRPM, afilm onRPMandcase studiesthat explain how other businesses have ended up breaking the law.

Ann Pope,CMASenior Director, Antitrust, said:

“This decision should act as a warning to companies that resale price maintenance is illegal and that warning letters issued by theCMAare 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. TheCMAwants to ensure consumers get a fair price and a good deal.

“That can only happen when retailers are free to set their own prices.”