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Thursday, 27 March 2014

OFT issues decision in mobility scooters sector

According to its press release, the OFT has today found that Pride Mobility Products Limited and some of its retailers have infringed competition law regarding the sale of mobility scooters. The release goes on:
The OFT found that over various periods relating to different retailers between 2010 and 2012, Bicester-based Pride entered into arrangements with eight of its UK-wide online retailers which prevented them from advertising online prices below Pride's Recommended Retail Price (RRP) for certain models of mobility scooter contrary to Chapter I of the Competition Act 1998. The OFT found that these practices limited consumers' ability to compare prices and get value for money.
Further details on this investigation and the OFT's earlier market study into mobility aids can be found on the project case page. The text of the decision will be published in due course following the redaction of commercially sensitive information.

A straightforward case of price-fixing? No, it seems not - prices were not fixed, just the ability to advertise discounted prices was. Section 39(3) of the Competition Act 1998 provides that a party to a 'small agreement' (and which is not a price fixing agreement) is immune from financial penalties for an infringement of the Chapter I prohibition. A 'small agreement' is an agreement between undertakings whose combined turnover did not exceed £20 million in the business year ending in the calendar year preceding the one during which the infringement occurred. The OFT reviewed the turnover of Pride and each of the eight retailers involved in the infringement and found that they all benefit from this immunity from penalties.

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