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CMA issues Black Friday price-fixing warning to online retailers

With ‘Black Friday’ looming, the Competition and Markets Authority (CMA) has taken the opportunity to launch a campaign to remind online sellers and marketplaces of their competition law obligations with particular emphasis on the dangers of price fixing. The unusual warning extends to software providers if they assist such sellers in facilitating price coordination.

The campaign follows hot on the heels of several investigations, ranging from a cartel affecting the sale of posters and frames (where competitors agreed not to undercut each other’s prices when selling on Amazon) to vertical restrictions intended to limit online discounts in the bathroom fittings sector.

Some competing retailers regularly monitor rivals' pricing and adjust their own pricing accordingly, using sophisticated software to do so. Provided this activity is done independently, and with no agreement between competitors to coordinate pricing, it should not present competition concerns; but, it is important that online sellers do not use this technology to support an underlying anti-competitive agreement to coordinate prices.

As part of its campaign, the CMA has published an at-a-glance guidance note for online sellers, together with an illustrative case study.  The CMA's message is very simple and underlines both the dangers of price fixing agreements and information sharing. Although focused on restrictions agreed between competing sellers (ie. is horizontal), the guidance highlights the CMA's general interest in online sales restrictions, a topic which is also being considered at length as part of the European Commission's ongoing E-commerce sector inquiry, the preliminary results of which have are summarised in a recent TLT report which you can download below.

The CMA has acknowledged that the majority of online sellers are keen to comply with competition law, but has taken this step as a precautionary measure as pre-Christmas pressure builds over forthcoming weeks.

For further information, please contact TLT's competition team: miles.trower@tltsolicitors.com (+44 (0)333 006 0574) or dimitris.sinaniotis@tltsolicitors.com (+44 (0)333 006 0497).

This publication is intended for general guidance and represents our understanding of the relevant law and practice as at November 2016. Specific advice should be sought for specific cases. For more information see our terms & conditions.

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