Investigation into resale price maintenance by the Irish Times
July 24, 2003
Outcome of investigation
In 2002, the Competition Authority (“The Authority”) began an investigation into resale price maintenance in the newspapers and periodicals industry. The Authority outlined its concerns with respect to possible resale price maintenance by The Irish Times Limited (“The Irish Times”) in its agreements with retailers. Subsequently, assurances were offered by The Irish Times to amend the conduct in question.
As a result of the assurances offered by The Irish Times, the Authority decided to discontinue its investigation for so long as The Irish Independent complies with the terms of those assurances.
Outline of case
In 2002, the Authority began an investigation into resale price maintenance (RPM) in the newspapers and periodicals industry, based on information it received from a Government department.
RPM is the term used to describe an agreement between a supplier and its reseller, which requires the reseller to sell the goods or services concerned at a price fixed by the supplier. RPM therefore eliminates the possibility of price competition between resellers and means that customers are denied the possibility of shopping around for better value. RPM is regarded by the Authority (and most, if not all, other competition agencies around the world) as a serious competition law infringement.
In principle, recommended resale prices do not raise competition concerns. A supplier is generally free to recommend resale prices to retailers. However, “recommended” resale prices will be regarded as fixed or minimum prices, and consequently as anticompetitive, where the supplier ensures, that the retailer does not resell below the recommended price level.
Various means can be used by suppliers to achieve this goal, such as a price monitoring system used to ensure that recommended prices are actually maintained as fixed resale prices. Similarly, making the grant of rebates or bonuses to retailers dependent on their sales at the recommended resale price is also likely to involve a breach of both EU and Irish competition rules.
The Authority outlined its concerns with respect to possible resale price maintenance by The Irish Times in its agreements with retailers. The Irish Times was helpful and co-operative to the Competition Authority during the investigation in offering remedies to address the Competition Authority’s concerns.
Subsequently, The Irish Times agreed to amend its price increase notices circulated to newspaper retailers. This, along with other measures, ensures that The Irish Times does not appear to encourage newspaper retailers in any way to raise the resale price of newspapers when The Irish Times increases the cover prices of its newspapers.
To learn more on this case read our Enforcement Decision Note relating to Agreements between The Irish Times Limited and newspaper retailers allegedly fixing the retail price of The Irish Times newspaper.
Relevant provision
Section 4 of the Competition Act 2002
Article 101 of the Treaty on the Functioning of the European Union
Return to Closed Investigations