The CPC sanctioned wholesalers of leading brands children's goods for infringements of competition
By Decision No. 369/08.04.2021 the Commission for Protection of Competition imposed a pecuniary sanction in the amount of 434 634 BGN on SMART SM OOD for committed infringement of art. 15 of the Law on Protection of Competition (LPC), manifested in participation in a prohibited agreement for resale price fixing of child care and mother care products between SMART SM and its clients.
By DecisionNo. 370/08.04.2021, the Commission established infringements of art. 15 of the LPC, committed by Iventas EOOD and manifested in participation in series of prohibited agreements with the retailers for fixing the retail prices and also for limiting trade by setting different levels of commercial discounts and conditions for their use, depending on the resale channel – via online or physical shop.
For the established infringements the Commission imposed a pecuniary sanction on Iventas in the amount of BGN 522 996.
Both administrative proceedings have been initiated upon a signal filed by consumer, which contains observations for permanently identical prices of Phillips Avent and Medela breast pumps in stores operated by various retailers.
Following the received signal, the Commission conducted unannounced inspections at the premises of Iventas, SMART SM and Hippoland, where copies of electronic correspondence, commercial contracts, and other documents were seized.
In the course of the proceedings, the CPC collected detailed information from numerous traders of children's goods on the territory of the country.
Based on the analysis of the collected information and evidence, the CPC established that Smart and Iventas as suppliers of various brands children's goods, such as Medela, Canpol, Phillips Avent, Tommee Tippee, etc., have coordinated together with their counterparties the resale prices for end consumers, time periods of promotional activities, the range of products to be included and the specific promotional price.
The CPC established that each supplier engaged in a set of practices, actions and measures to stimulate and support the implementation of the prohibited agreements. In addition, each one of them provided information to its customers about its own behavior as a participant in the retail market, reaffirming the belief that exactly the indicated product prices should be applied as end customer prices.
Such agreements have potential to eliminate price competition between distributors of the same brand, as well as to eliminate the possibility of decrease in consumer prices as a result of competitive pressure. This results in stable prices over time, other than those that would occur in competitive environment. This behavior of the undertakings affects the welfare of consumers of many products, such asbreast pumps and feeding bottles, appliances, strollers, toys, cosmetics for babies and young children, maternal care products, etc.
In addition, the Commission found that there was an agreement between Iventas and its e-shop retailers to limit online sales. This agreement objectively has the potential to limit the resale of products online and has an adverse effect on price levels in the long run.
By its decisions, the Commission ordered the termination of the established infringements.
On the grounds of Art. 64, par. 1 of the LPC, the Commission’s decisions can be appealed before the Administrative Court - Sofia District by the parties and by any third party having a legal interest within 14 days starting from its notification in accordance with the Code on Administrative Procedures and for third parties from its publication in the Commission's electronic register.
The full text of the decisions is available in the public electronic register of the CPC on the Internet address: http://reg.cpc.bg.