OFT fines Action Man-maker £4.95m for price fixing - BikeBiz

OFT fines Action Man-maker £4.95m for price fixing

Discounters rejoice! The Office of Fair Trading today fined toy manufacturer Hasbro £4.95m for anti-competitive price fixing. Bang goes UK plans for the kind of bike trade cartels that the Dutch equivalent to the OFT reckons goes on in the Netherlands...
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According to the OFT, Hasbro and 10 distributors broke competition law by entering into price-fixing agreements between early 2001 and July 2001. These agreements prevented the distributors from selling Hasbro toys and games below Hasbro's list price without permission. Such agreements infringe Chapter I of the Competition Act 1998, which came into force in March 2000.

Hasbro's penalty – the largest so far under the Competition Act - has been reduced under the OFT's leniency programme by 45 per cent. Without this reduction the fine would have been £9 million. Hasbro was granted leniency because it asked for it at an early stage of the investigation and co-operated fully.

No fines have been imposed on the distributors as the OFT found that the initiative to impose the prices was Hasbro's and the distributors had no choice but to accept them.

The Competition Act 1998 gives the OFT powers to investigate suspected infringements of the Act's prohibitions and take preventive action where it finds that infringements have taken place. The Chapter I prohibition prohibits "agreements between undertakings, decisions by associations of undertakings or concerted practices which have the object or effect of preventing, restricting or distorting competition within the UK (or any part of it) and which may affect trade within the UK (or any part of it)...the Chapter II prohibition prohibits conduct by one or more undertakings which amounts to the abuse of a dominant position in a market which may affect trade within the UK (or any part of it)."

The OFT may impose a penalty of up to 10 per cent of UK turnover for a maximum of three years for infringement of either of the above prohibitions.

Also published today is a price-fixing allegation from the Dutch equivalent of the OFT(do these agencies have a cartel on when they publish this kind of stuff?). According to www.bike-eu.com, the NMa is accusing Royal Gazelle, Accell Group (Batavus, Koga, Sparta) and Giant Europe of being part of a cartel.

Furthermore, Gazelle, Accell, Giant and Union are accused of participating in a system - operative since 1998 - to exchange competition-sensitive information, such as market shares, prices and market trends

Accell chairman René Takes denied all the allegations, report BikeEurope.

Gazelle MD Klaas Dantuma said the NMa accusation was "nonsense."

He told BikeEurope: "All manufacturers purchase at the same suppliers and when they increase their prices all bikes become more expensive. That is the only reason, that prices follow each other. We maintain our own price policy."

If NMa finds the Dutch manufacturers guilty they could be faced with fines of up to 10 percent of their annual turnover.

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