The UK’s competition and consumer law enforcement body is harnessing the power of online price monitoring to help detect where firms might be engaging in resale price maintenance (RPM).
The Competition and Markets Authority (CMA) has developed a bespoke price monitoring tool to detect suspicious online pricing activity. The idea for the tool arose from a series of competition law cases involving musical instruments where the CMA observed the use of online price monitoring by certain suppliers to monitor retailers’ prices. Its first use will be to deter online RPM in the musical instruments sector.
If a supplier tells a retailer they can’t sell their product below a minimum price and the retailer agrees, then they are illegally maintaining the resale price. A supplier is likely to have the same agreement with other retailers.
Arrangements like this prevent price competition between rival resellers and restrict the customer’s ability to shop around. Therefore, RPM is illegal and carries large fines and can also lead to director disqualifications.
In the future, our tool will be used to detect suspicious activity in other sectors. This way, we will have a better idea of which sectors to clamp down on – helping to protect more customers online.
If you have concerns about resale price maintenance or other anti-competitive behaviour, contact the CMA online here.