Bundeskartellamt imposes fines totalling approx. 10.9 million euros on account of vertical price fixing in the clothing industry
The Bundeskartellamt has imposed fines totalling around 10.9 million euros on two companies in the clothing industry on account of vertical price fixing. The companies involved are the clothing manufacturer Wellensteyn International GmbH & Co. KG (Wellensteyn) and the retailer Peek & Cloppenburg KG, Düsseldorf (P&C Düsseldorf). The proceedings were initiated with a dawn raid on 26 March 2013 following complaints to the Bundeskartellamt about the companies' practices. The infringements were committed between April 2008 and February 2013.
Andreas Mundt, President of the Bundeskartellamt:
"Wellensteyn set its retailers minimum sales prices and prohibited them from reducing prices and selling goods online. Any retailer found deviating from this strategy was threatened with a refusal to supply, which was also implemented in several cases. P&C Düsseldorf accepted these conditions and even asked Wellensteyn to take measures against price undercutting by other retailers. There are indications that these and similar price fixing practices in the textile sector could have relevance beyond the case in question. Such practices would be in clear violation of the prohibition of cartels."
The ability of a retailer to freely set its prices is good for competition and consumers. Agreements between retailers and manufacturers on specific sales prices or minimum price levels are therefore prohibited. Manufacturers may on no account threaten to penalise retailers in order to induce them to observe fixed or minimum price levels. With regard to the circumstances of the case an exemption from the prohibition of cartels was out of the question. Retailers which insist on their freedom under competition law to set prices should not suffer any disadvantages from poor supply or delays in supply.
With regard to the brick-and-mortar food retail sector, the Bundeskartellamt has published a Guidance note on the prohibition of vertical price fixing which explains which practices are admissible and which are not. The practical examples can also be of relevance for other consumer goods markets, depending on how similar the respective market conditions are to those in the brick-and-mortar food retail sector.
A mitigating factor in the calculation of the fines was that they were imposed on the basis of a negotiated agreement (settlement). For discretionary reasons no fines were imposed on the individuals involved in the present case.
The orders imposing the fines are not yet final and can be appealed to the Düsseldorf Higher Regional Court.
A summary of the case (in German) will be published shortly on the Bundeskartellamt's website.