Price fixing - any lawyers out there?

[david_e]

Is this practice legal or not - in the UK and across Europe? I thought it had been banned until I read some comments from Sea Ventures in this months' YM. They were referring to a French Jenneau dealer and castigating him for selling a new boat cheaper than them. I just wonder what this person does themselves when they go out to buy a major item such as a car or furniture, pay list price without qualm, not try and negotiate a better deal, think not somehow.

Is this yet another example of Rip Off Britain?

 

[andrewhopkins]

Thats what i thought

I read it and thought their comments were completely illegal. Anyone is allowed to sell any product in the EU.

 

[ParaHandy]

Hang on a mo, David.....they're left hand drive, aren't they - no good for UK?

But, these frog tossers can do what they like.......got no boat building industry left here and we ain't part of euro...........high exchange rate.........screeds more like the same

 

[SimonD]

Re: Thats what i thought

I believe that the practice described amounts to a form of vertical restraint called Retail Price Maintenance. Vertical restraints are a complex area of competition economics which falls within the ambit of the Competition Act 1998 and the equivalent EU Articles 81 and 82. The main problem with Retail Price Maintenance in this instance is that it prevents price competition between retailers. Such competition might otherwise be expected to drive prices down.

It is entirely possible that the situation described is an abuse of EU competition law, in which case, the penalties are not insignificant.

If there is a lawyer out there it would be helpful to hear their views (without prejudice of course!) otherwise there may be someone sufficiently interested to contact the OFT for a preliminary chat (www.oft.gov.uk).

 

[robp]

Ill thought through remarks that would probably not be repeated at board level. They would like to be seen to be dissuading cross border selling, (in the distributors eyes). But the penalties are high and it will rapidly decline. Probably we think about it more here than in other "States", because of the "Rip Off Britain" syndrome. Our government seem to be pushing it (the Competition Act) harder than others'. Interestingly, it makes the need for caution on the part of the end user, even more important. Not all companies are clever enough to lower margins and stay in business.

 

[sleepy3]

Price fixing is illegal

I'm not a lawyer, just very familiar with the CAct.

Price fixing is illegal. Chapter II (Art 82) deals with the abuse of a dominant position. Of relevance here is the Chapter I prohibition (Art 81). Interesting guidelines are available in the OJ on the applicability of Art 81 to horizontal co-operation (which appears most relevant to the original example). Also, there is also a new de minimis (the law is not concerned with trivial matters) Notice which does not apply to price fixing, export bans, trade between MS or retail price maintenance.

However, I doubt that “castigating” another firm in the press is enough evidence of price fixing to interest a competition authority - particularly if the other firm has set cheaper prices! Buy the Jenneau in France. Now, if they refuse to sell it to you, that’s a different story…

 

[ParaHandy]

Re: Price fixing is illegal

Agreed...buy it in France and then see what happens.

3 yrs ago bought a Volvo car in Holland. Dutch "purchase tax" (contrary to what one might believe, EU tax structure is far from harmonised) and generally better price meant that a considerable saving was made. The UK Volvo agent claimed that Volvo would not allow a discount greater than 5% (I think). Which is 100% rip-off. Volvo couldn't refuse to deliver a RH drive model in Holland, they just took their time - 7 months. But.....3 years later and the dealer *discounts* the trade-in value because it's an import...or tries to. It's maddening.

The people running these yacht agencies, in another life, would be running garages and selling second-hand motors. Most look like spivs imho.

 

[sleepy3]

Wow! now I\'ve read the article in YM

I have popped it in the post to the Director General of Competition at the European Commission.

 

[david_e]

Re: Wow! now I\'ve read the article in YM

What facts made you change your mind?