The Competition and Markets Authority (CMA) has ruled that Cassio Electronics Co. Limited has infringed competition law by engaging in the illegal practice of resale price maintenance (RPM) which is designed to restrict retailers' freedom to set their own prices by requiring them to set them at a minimum (or higher) price. The CMA began its investigation into these practices in April 2017 and the decision follows the statement of objections against Casio which the CMA released in April 2019. By way of settlement, Cassio has been fined around £3.7 million for the infringement. Despite getting a 20% discount for settling, this is a record fine for RPM.
As part of the settlement agreement, Casio admitted that between 2013 and 2018 it engaged in RPM and monitored retailers' prices of the digital pianos and keyboards it supplied and pressured retailers to modify or raise their prices online when they fell below the specified price. These practices restricted customers' ability to get the best price for the products.
The CMA discussed the ways that Casio was monitoring retailers' prices and noted that advances in software in recent years was a key enabler for this sort of monitoring. However, Casio was also able to keep an eye on retailers' prices through other retailers who would report retailers that gave discounts on the digital pianos and keyboards.
This case serves as a warning to suppliers to review their practices and ensure that they are not setting prices at which others can resell products. RPM can be indirect, including where there are financial incentives for retailers to sell at a certain price. There can be some exceptions where it is possible to engage legally in RPM, but this is rare and should be looked at in detail to ensure that the activity does not infringe competition law.
For more information, please contact Gordon Drakes or your regular contact in the Commercial IP or the Competition and Regulatory team.
Co-authored by Rachel Bowley