The FCA proposes that the Market Court impose a 100’000 euros competition infringement fine on Lastentarvike Oy for conduct violating the EC competition rules and the domestic Competition Act in the retail sales of baby prams and pushchairs.
For several years, Lastentarvike included conditions in its distribution agreements which prevented the dealers from selling the baby prams and pushchairs purchased from Lastentarvike to consumers outside their own territories. Additionally, the terms prevented authorised distributors from selling and marketing the products in the Internet and national specialist magazines.
The restrictions decreased competition on consumer-customers between the retailers and hence served to maintain higher prices than would have been the case in a competitive situation. Allowing free retail sales to consumers would also have forced the undertaking’s own stores to respond to increased competition.
An undertaking using a so-called selective distribution system may forbid its authorised distributors from selling products covered by the agreement to non-authorised dealers but the sales to other authorised distributors and end-users cannot be restricted. In addition, retailers must generally be free to market the products they represent in the Internet and the media.
In the selective distribution system, restricting the retail sales to consumers acting as end-users is considered a hardcore competition restraint under the competition law and is hence forbidden as a rule.
Conduct covered whole of Finland
In practice, the agreements which contained forbidden terms covered the whole of Finland and were by nature such that they also prevented sales to foreign end-users. The position of Lastentarvike as the market leader in the field and as the representative of strong brands also strengthened the harmful impacts of the restraints on competition.
When determining the size of the competition infringement fine, the FCA took into account not only the undertaking’s turnover but also the nature, extent and duration of the competition restraints and the fact that the violations had clearly been committed with the purpose of limiting competition. In addition, the undertaking ceased its restrictive conduct only after the FCA had intervened in the matter several times.
For further information: Head of Research Markku Tupamäki, tel. +358 9 7314 3370 Senior Research Officer Charlotte Leskinen, tel. +358 9 7314 3617
last modified 11/9/2006