A top UK lighting manufacturer has been fined £2.7 million and others are receiving official warnings in a major price fixing probe into the industry.
Investigators from the Competitions and Market Authority achieved a major victory this week as the National Lighting Company, whose brands include Saxby and Endon, became the first company to be fined. It was found that the firm required its distributors and retailers to use a minimum price when selling its luminaires online, in breach of competition laws.
This illegal practice is known as resale price maintenance and, says the CMA, it means customers miss out on the best possible prices and cannot shop around for a better deal on that supplier’s products. NLC tried to avoid detection by not committing the illicit agreements to writing. The penalty covers violations in relation to its commercial lighting brand Saxby and decorative lighting brand Endon and includes an extra fine because the company ignored an earlier warning letter.
A warning letter is sent when the Competition and Markets Authority ‘has reasonable grounds to suspect anti-competitive behaviour’. It’s not a formal allegation but must be taken seriously and requires a considered response.
In a new development, the CMA has confirmed to Lux that it is sending a number of official warning letters to other suppliers in the light fittings sector where it says there are ‘reasonable grounds’ to suspect they may also be engaging in retail price maintenance.
To help stamp out resale price maintenance, the CMA has also today re-issued its advice to help the lighting industry stay on the right side of the law. This includes an open letter, a film on RPM and case studies that explain how other businesses have ended up breaking the law.
CMA’s senior director Ann Pope told Lux: ‘This decision should act as a warning to companies that resale price maintenance is illegal and that warning letters issued by the CMA are to be taken seriously and not to be ignored.
‘The digital economy is booming and with so many businesses operating online it is vital that fair competition is maintained across all sectors. The CMA wants to ensure consumers get a fair price and a good deal.
‘That can only happen when retailers are free to set their own prices.’