CMA Reminds Businesses About Competition Law

The Competition and Markets Authority (CMA) has reminded businesses that it can be illegal for suppliers to restrict their retailers’ prices. Resale Price Maintenance (RPM) occurs when a supplier and a retailer agree that the retailer will not resell or advertise the supplier’s products below a specified price. RPM can also be achieved indirectly, for example as a result of restrictions on discounting or where there are threats or financial incentives to sell at a particular price. Merely setting a ‘recommended’ retail price is not, however, against the law, provided that there are no attempts to enforce compliance. RPM agreements are usually illegal as they can prevent retailers from being able to offer lower prices to attract customers, or to sell off surplus stock. This is a particularly important issue as online sales channels develop, with restrictions on discounting for internet sales capable of being illegal RPM. The CMA’s research shows that businesses’ understandi

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