December 2004
Price-fixing: it's not a game
The OFT was celebrating victory after the Competition Appeals Tribunal's (CAT's) judgment of 14 December 2004 on price fixing.
The Office of Fair Trading found that Argos and Littlewoods had entered into a price-fixing agreement along with Hasbro. It fined them a total of £22.6m. As a result of providing the information to begin the investigation Hasbro was a granted full leniency.
In dismissing the appeal, which was confined to the issue of liability, the CAT said, "After considering all the evidence, including the evidence of the witnesses called by the various parties, we find on the facts, and for the reasons given in the judgement, that each of Argos and Littlewoods respectively were a party to a bilateral agreement or concerted practice with Hasbro, and to a trilateral agreement or concerted practice with Hasbro and each other..."
The OFT Chairman, John Vickers, illustrated the consumer benefits of such a ruling, "Consumers suffered as the [price-fixing] agreement kept prices artificially high. For example, with price-fixing a game of Monopoly cost £17.99 in the 2001 Spring/Summer catalogues of both companies. Thanks to competition law enforcement the game is now sold for £13.99 by Argos and £13.49 by Littlewoods."
Briffa Comment
This is further evidence of the change in attitudes towards competition law infringement. The OFT illustrated that it was serious by finding these companies guilty and CAT has supported that decision. However, the real test will depend on whether CAT supports the size of the fine, as this is the real precedent that had been set by the original OFT decision.