Manufacturers are allowed to make non-binding price recommendation, but they cannot issue merchants with price specifications. Otherwise, they are in breach of antitrust law.

GRP Rainer Lawyers and Tax Advisors in Cologne, Berlin, Bonn, Düsseldorf, Frankfurt, Hamburg, Munich, Stuttgart and London conclude: Manufacturers in various sectors constantly try to issue merchants with price specifications. However, this is detrimental to consumers because it restricts competition among merchants and results in products not being offered at lower prices. Violations of antitrust law and competition law stemming from vertical price-fixing arrangements can prove to be expensive.

This became apparent to five furniture manufacturers, against which the Bundeskartellamt, Germany’s Federal Cartel Office, initiated proceedings that have since been concluded. The Cartel Office issued fines against the companies and four responsible managers amounting to a total of around 4.4 million euros on account of illegal price-fixing agreements.

Merchants had complained about price specifications and the Bundeskartellamt subsequently opened proceedings in June of 2014. In the course of this, the competition watchdog came across vertical price-fixing arrangements. Minimum prices and so-called “discount corridors” (Rabattkorridore) were to be strictly observed in relation to consumers. It was said that the fines imposed could have been higher if the cartel members had not cooperated with the Bundeskartellamt, thus making it impossible to reach an amicable conclusion to the proceedings.

Violations of antitrust law, e.g. due to price-fixing agreements, can be met with severe penalties. These can go beyond mere fines, with the companies concerned potentially facing damages claims and criminal repercussions. Senior managers can also be held liable.

Having said that, violations of antitrust law or competition law are by no means always clearly intentional. Infringements can sometimes occur unwittingly, for example because individual contractual clauses contravene existing laws. The consequences may nevertheless be severe. It is therefore advisable to have agreements examined by competent lawyers, including with a view to any implications under antitrust law. Appropriate legal advice is also called for if violations of antitrust law or competition law have already occurred and claims need to be seen off or enforced.

https://www.grprainer.com/en/legal-advice/antitrust-law.html