The latest enforcement of UOKiK in vertical agreements
Written By
In July, the Polish Competition Authority (UOKiK) announced the initiation of a preliminary investigation and the fact that they conducted an inspection at the premises of Kärcher. The UOKiK suspects that Kärcher imposed minimum resale prices on distributors selling its professional line of products online.
Distributors who do not apply the imposed minimum resale prices may be penalised by Kärcher by having their discounts revoked and their cooperation agreements terminated. As a result, customers cannot purchase Kärcher products online at prices lower than the ones imposed.
According to the UOKiK’s press release, during the inspection, UOKiK officials collected over 2000 e-mails and 200 documents that may indicate anticompetitive practices.
Furthermore, the UOKiK has recently issued a statement in a similar case against the Polish distributor of Merida bikes for limiting the possibility of purchasing such machines via the Internet.
The UOKiK alleges that Merida’s brick-and-mortar distributors can present Merida bikes on their websites, and customers can place orders online. However, no shipping is available, and customers must pick up the bikes they order from physical stores.
Such a practice effectively excludes online sales since consumers are unlikely to travel a long distance only to collect a bike.
In addition, according to a UOKiK press release, Merida is said to violate competition law rules by forbidding its distributors to sell products on online platforms such as Allegro, eBay, or OLX.
In its press release, the President of the UOKiK pointed out the following:
“the principles of the sale of bikes by Merida Polska mean that the consumer has a limited choice of sellers and can only purchase equipment from local stores. The consumer does not have the opportunity to take advantage of a more attractive offer via the Internet. The above may result not only in reduced competition among sellers but also in higher prices for the equipment.”
Both companies may face penalties for participating in an agreement restricting competition, in the amount of up to 10% of their annual turnover, whereas their managers may be fined as much as PLN 2 million (approx. EUR 440 000).
The UOKiK’s press releases regarding Kärcher and Merida are available here and here.
Please contact Piotr Dynowski and Marcin Alberski for more information.
