Competition regulator takes action on online sales
15th March, 2013
The Office of Fair Trading is taking action against a supplier and retailers that agreed not to sell the supplier's products online or advertise the prices of the products online.
What is happening?
The Office of Fair Trading has provisionally concluded that Roma Medical Aids Limited, a manufacturer of mobility scooters based in Bridgend, Wales, and some of its retailers have infringed competition law.
It is alleged the parties have entered into agreements that prevented UK-wide online retailers from selling Roma branded mobility scooters online or from advertising the prices of the scooters online.
The Office of Fair Trading has notified the parties of its proposed decision which, if confirmed, may lead to financial penalties being imposed on the companies involved in the arrangements and to directors of the companies being disqualified from holding any directorships for up to 15 years. The alleged arrangements took place in 2011 and 2012.
Why has this action been taken?
The Office of Fair Trading wants consumers to be able to benefit from the ability to shop around online and for there to be fair and open access to a whole range of products and pricing information.
What does this mean for me?
Suppliers of goods and services may use a variety of means of getting their products and services to markets, including online retailing.
Low cost online retailing may adversely affect the profitability of physical retailing operations, leading to complaints to suppliers by certain retailers of the activities of other competing retailers. Some retailers may suggest that the supplier brings pressure to bear on the online retailer not to sell the supplier’s products and services below a certain price.
Suppliers may also seek to prevent complaints from distributors and retailers by prohibiting distributors and retailers from selling their products online.
However, suppliers of goods and services using online distribution channels or operating in markets in which distributors and retailers wish to use online distribution operations must be careful to ensure that they do not attempt to manage their distribution arrangements in a manner that prevents, restricts or distorts competition – and invite scrutiny and potential action from the authorities.
How can I get more help on this?
Ward Hadaway can advise suppliers on how to stay the right side of competition law whilst still running your business effectively.
For more information on how we can help you, please get in touch.
Please note that this briefing is designed to be informative, not advisory and represents our understanding of English law and practice as at the date indicated. We would always recommend that you should seek specific guidance on any particular legal issue.
This page may contain links that direct you to third party websites. We have no control over and are not responsible for the content, use by you or availability of those third party websites, for any products or services you buy through those sites or for the treatment of any personal information you provide to the third party.
