Commercial fridge supplier ITW has been hit with a £2.2 million fine by the Competition and Markets Authority (CMA) for “breaking competition law by restricting dealers from offering online discounts”.
According to the CMA, the £2.29m fine includes a 10% reduction after ITW set up a “comprehensive programme to train its staff in compliance law” and an additional 20% discount “to reflect savings due to ITW’s admission and cooperation with the CMA under a settlement agreement”.
The supplier, which owns Foster Refrigerator, was issued with a formal allegation from the CMA in January this year for breaches of competition law. The fine followed ITW’s admission that it had engaged in resale price maintenance (RPM) in internet sales of its Foster commercial fridges between 2012 and 2014.
Earlier this year, bathroom fittings supplier Ultra Finishing received a fine of £786,668 for breaches of competition law in the bathroom industry.
According to a statement from the CMA, Foster Refrigerator operated a ‘minimum advertised price’ policy and “threatened dealers with sanctions – including threatening to charge higher cost prices for Foster products or stopping to supply – if they advertised below that minimum price”.
CMA senior director Ann Pope said: “Price competition from online sales is usually intense, given the ease of searching on the internet. ITW’s practice of setting minimum advertised prices restricted dealers from offering discounted prices online, reducing competition across online and ‘bricks and mortar’ sales, and denying buyers the benefit of lower prices for Foster’s commercial fridges. The ultimate losers are customers of restaurants or caterers, for whom the cost of their meal could have risen.
“The CMA takes vertical price-fixing seriously, and recently fined a supplier of bathroom fittings for similar behaviour. We are focused on tackling anticompetitive practices that diminish the many benefits of e-commerce across all sectors.
“The CMA welcomes ITW’s adoption of a compliance programme, which is a positive step in ensuring it does not break competition law again, and which merited a discount of 10% to the penalty.”