UK competition regulator the CMA has said that online and digital markets are a priority area. Online markets can help retailers to compete more effectively, keeping costs low and providing greater choice, as well as enabling consumers to find the best prices But they can also be manipulated to undermine these benefits to the consumer.
We have previously reported on cases where the CMA clamped down on attempts by suppliers to keep online retail prices at or above minimum levels to protect margins for bricks and mortar distributors. Now the CMA has fined an online licensed merchandise seller £163k for use of automated repricing software to keep prices high.
Competing online sellers Trod and GB Posters agreed not to undercut each other’s prices for sport and entertainment posters. Both companies used automated repricing software configured to keep the prices high, rather than to reduce them. (Amazon itself was not involved in the arrangements.)
GB Posters blew the whistle to the CMA and Trod was subjected to searches by both the CMA, and the police acting on behalf of the US Department of Justice in a separate criminal investigation.
Trod’s admission of its part in the arrangement, and cooperation with the investigation, means that the fine was reduced by 20%. And as whistleblower, GB Posters will benefit from the CMA’s leniency policy and so escape a fine.
This case highlights the attention the CMA is giving to e-commerce. Retailers need to be aware of the rules against market manipulation, and should be ready to report suspicious activity when they come across it.