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CMA Issues Decision Relating To Bathroom Fittings Sector

Sheree-Ann Virgin
18th May 2016
The Competition and Markets Authority issued its decision yesterday finding an infringement of Chapter I of the Competition Act 1998 and Article 101 of the Treaty on the Functioning of the European Union by Ultra, a supplier of bathroom fittings.

The decision finds that Ultra engaged in in resale price maintenance (“RPM”) in respect of internet sales of its Hudson Reed and Ultra branded products. RPM constitutes vertical price-fixing where a supplier restricts, either directly or indirectly, the ability of a retailer to set the prices at which it will resell the supplier’s products, for example by requiring the retailer to sell at a particular price or only above a minimum price. RPM is illegal because it prevents retailers from offering lower prices and setting their prices independently to attract more customers.

In this case the RPM was implemented indirectly: Ultra introduced an online brand management policy to its suppliers which included a recommended online price to manage the discounting of its products. However, the CMA held that the effect of this policy was RPM on the basis that resellers who set their prices below the recommended online price faced a range of potential consequences including withdrawal of supply, worsening of terms and withdrawal of permission to use copyrighted images of Ultra’s products.

The decision imposes a fine on Ultra of £786,668 after discounts for admissions and co-operation within the investigation and the implementation of a competition law compliance programme after the investigation.  It is the latest in a string of recent decisions CMA investigations into online price and discount restrictions.

If your contracts contain anti-competitive terms they are at risk of leading to fines imposed by competition authorities and damages actions from affected parties. Maitland Walker LLP can advise whether the terms of your contracts are compliant with competition law whether you are a brand owner or reseller. Maitland Walker also has expertise in pursuing and defending complaints and other investigations before competition authorities like the CMA and European Commission and in bringing and defending private competition law damages actions.

To discuss any competition law issues please contact Julian Maitland-Walker or Sheree-Ann Virgin.

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