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    1. Luis21 is offline

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      #1

      Price fixing advice needed - UK competition law

      I recently started using a new supplier for my womens clothing boutique. They are saying that their prices are fixed across all retailers, so that there is no competition. This does not seem right to me, but I am not sure how to prove that this supplier is doing something wrong.
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    2. PatrickTwist is offline

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      #2
      I know how you can prove to the supplier that price fixing is illegal: Show them the Competition Act! This regulation does not allow anti-competitive actions among businesses, including price fixing. The three tenets of the Competition Act are that businesses must not agree to:

      ● Fix prices or terms of trade, for example, agreeing on price rises with competitors.
      ● Limit production in order to reduce competition.
      ● Share out markets or suppliers, for example, agreeing with a competitor that you'll bid for one contract and they'll take another.
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    3. Thank you for this post:

      Luis21 (23 Apr 2011)

    4. Luis21 is offline

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      #3
      Thank you for clarifying that with me. The supplier has also said that it has discussed pricing plans with a business I know is the suppliers competitor. Is this also illegal?

    5. PatrickTwist is offline

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      #4
      Yes, what the supplier is doing is illegal. If they both then “happen” to decide to raise prices, it is considered fixing prices. In the Competition Act, the specific prohibitions related to price fixing mean you cannot

      ● Agree on prices with your competitors.
      ● Share markets or limit production to raise prices.
      ● Impose minimum prices on different distributors.
      ● Agree with your competitors what purchase price you will offer your suppliers.
      ● Cut prices below cost in order to force a smaller or weaker competitor out of the market.

    6. Luis21 is offline

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      #5
      My supplier is definitely price fixing. What can I do about it, though?

    7. PatrickTwist is offline

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      #6
      Any business that price fixes is considered a cartel by the UK and EU and should be punished. In fact, the director of the business will be charged with a criminal offense and fined. The business itself will be fined ten percent of its turnover for three years.

      In order for the Office of Fair Trading to look into the price fixing supplier, the business must meet these qualifications:

      ● Two or more enterprises must cease to be distinct.
      ● The merger must not have taken place already, or must have taken place not more than four months ago.
      ● The business being taken over has a turnover in the UK of at least 70 million.
      ● The combined businesses have significant market presence.
      ● This applies if together they supply (or acquire) at least 25 per cent of a particular product or service in the UK (or in a substantial part of the UK), and the merger results in an increase in the share of supply or consumption.

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