Resale price maintenance – Bundeskartellamt imposes fine
06 May 2019
The Bundeskartellamt, Germany’s Federal Cartel Office, has imposed a total fine of around 13.4 million euros on a bicycle wholesaler for entering into resale price maintenance arrangements with 47 retailers.
Resale price maintenance entails the producer requiring its customers to sell the goods at a fixed price or not go below a certain price. We at the commercial law firm GRP Rainer Rechtsanwälte note that, as a consequence, resale price maintenance hampers competition and consistently violates the Gesetz gegen Wettbewerbsbeschränkungen (GWB), Germany’s Act against Restraints of Competition.
A recent investigation by the Bundeskartellamt concluded that a bicycle wholesaler had committed such a violation. As disclosed by the former on January 29, 2019, the wholesaler reportedly entered into agreements with its member companies concerning the retail prices of certain bicycle models. These were said to have prevented the independent retailers from undercutting a minimum selling price specified by the wholesaler, with the latter also checking for compliance with the pricing policy. According to the Bundeskartellamt, the overall effect of this was to significantly impede price competition among the members of the purchasing cooperative and thus ultimately have a negative impact on end consumers.
While noting that temporary group-wide price controls are possible within a narrow framework, e.g. in order to implement joint promotional campaigns, the Bundeskartellamt found that the boundaries had clearly been overstepped in this case, resulting in a situation analogous to a distribution cartel among the participating merchants. Some of the pricing arrangements dated back to 2007 and only came to an end when the wholesaler’s business premises were searched in February of 2015.
Agreements between companies that restrict or impede competition are prohibited under the GWB. Price-fixing arrangements are typically considered to be unlawful agreements of this kind.
Violations of competition or antitrust law may be met with severe penalties. Yet violations are by no means always as obvious as in the case of illegal price-fixing arrangements. Even individual clauses within agreements may be deemed to be anticompetitive and give rise commensurate sanctions. That is why it is advisable to have agreements reviewed for violations of competition or antitrust law.
Lawyers with experience in the fields of competition and antitrust law can offer advice.