Resale price maintenance by the Irish Independent
October 10, 2003
Outcome of investigation
In 2002, the Competition Authority (“The Authority”) initiated an investigation into resale price maintenance in the newspapers and periodicals industry. The Authority outlined its concerns with respect to possible resale price maintenance by The Irish Independent in its agreements with retailers. Subsequently, assurances were offered by The Irish Independent to amend the conduct in question.
As a result of these assurances, the Authority decided to discontinue its investigation for so long as The Irish Independent complies with the terms of those assurances.
Outline of case
In 2002, the Authority began an investigation into resale price maintenance (RPM) in the newspapers and periodicals industry, based on information it received from a Government department.
RPM is the term used to describe an agreement between a supplier and its reseller, which requires the reseller to sell the goods or services concerned at a price fixed by the supplier. RPM therefore eliminates the possibility of price competition between resellers and means that customers are denied the possibility of shopping around for better value. RPM is regarded by the Authority (and most, if not all, other competition agencies around the world) as a serious competition law infringement.
In principle, recommended resale prices do not raise competition concerns. A supplier is generally free to recommend resale prices to retailers. However, “recommended” resale prices will be regarded as fixed or minimum prices, and consequently as anticompetitive, where the supplier ensures, that the retailer does not resell below the recommended price level.
Various means can be used by suppliers to achieve this goal, such as a price monitoring system used to ensure that recommended prices are actually maintained as fixed resale prices. Similarly, making the grant of rebates or bonuses to retailers dependent on their sales at the recommended resale price is also likely to involve a breach of both EU and Irish competition rules.
The Authority outlined its concerns with respect to possible resale price maintenance by The Irish Independent in its agreements with retailers. The Irish Independent was cooperative in providing information to move this investigation forward and in suggesting measures to address the Authority’s competition concerns.
Subsequently, The Irish Independent agreed to amend its price increase notices circulated to newspaper retailers. This, along with other measures, ensures that The Irish Independent does not appear to encourage newspaper retailers in any way to raise the resale price of newspapers when The Irish Independent increases the cover prices of its newspapers.
To learn more on this case read our Enforcement Decision Note regarding Agreements between Independent Newspapers (Ireland) Limited and newspaper retailers allegedly fixing the retail price of Independent newspaper titles.
Relevant provision
Section 4 of the Competition Act 2002
Article 101 of the Treaty on the Functioning of the European Union
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