Price probe to continue, says competition watchdog

The Competition and Markets Authority is continuing its probe into price fixing in the lighting industry after fining one manufacturer £2.7 million last month.

The watchdog has sent warning letters to a number of other lighting companies that it suspects of anticompetitive behaviour, and is stepping up its efforts to raise awareness in the industry, appearing at events and publishing materials explaining how to stay on the right side of the law.

Investigators discovered that the the National Lighting Company, whose brands include Saxby and Endon, required resellers to stick to a minimum price when selling its luminaires online, so that buyers could not get better deals by shopping around.

NLC sought to hide the illegal practice by agreeing terms verbally when it signed licence deals with resellers. In a recording of one meeting, a reseller asked the company: ‘Isn’t it illegal to fix prices?’ The answer came: ‘It is illegal to fix prices. That’s why we won’t put anything in writing.’

Resellers who didn’t play ball were given 24 hours to put their prices back up, or have their accounts frozen. ‘A significant number of accounts were put on ‘stop’’, one witness told the CMA.

In a statement on its website, NLC acknowledged that its actions had breached competition law, and said that it ceased these practices “as soon as the CMA opened its investigation”. However, the CMA said NLC had ignored an earlier warning letter – resulting in a 25 per cent increase in its fine.

The company said that its past practices ‘were never aimed at harming consumers but merely sought to protect its bricks-and-mortar customers from the significant damage being done to them by the free riding of certain internet resellers’.

It said it had put in place a ‘market-leading compliance programme’, and called on the CMA to ensure a ‘level playing field for all suppliers’.