The Competition and Markets Authority (CMA) has warned suppliers of mobility scooters that they must allow retailers to freely advertise their prices online as it emerged today that it continues to investigate TGA Mobility over a “potential” breach of competition law.
TGA Mobility Limited and 2DS & TGA Holdings Limited (TGA) has been under investigation since April over concerns that it may have restricted its retailers from advertising prices online.
This follows a warning letter sent by the Office of Fair Trading (OFT), one of the CMA’s predecessor bodies, to several companies in the mobility sector, including TGA, in March 2013 warning of the unlawfulness of such behaviour.
The CMA’s current investigation examined TGA’s agreements with three online retailers. It found the agreements either prevented retailers from advertising prices of TGA branded mobility scooters online or from advertising them below specified prices.
Firms that make certain agreements with other companies where their combined turnover is no more than £20m are immune from fines under UK law.
However, the CMA does have the power to withdraw that immunity if it feels that any such agreement is likely to break competition law, which it has done in the case of TGA. It said it was the first time immunity has been withdrawn at this early stage of an investigation.
Following the withdrawal, TGA risks a penalty of up to 10% of its worldwide turnover if it restricts the freedom of retailers to advertise prices online in the future.
TGA made sales of almost £9m in its last financial year, meaning that if it did breach any regulations in future, it could be fined up to £900,000 should the CMA decide to apply the most severe penalty.
The CMA noted that TGA has now taken action to bring to an end the online price advertising restrictions in question.
It stated that the Suffolk-based manufacturer is now in the process of confirming to all its retailers that they are free to advertise prices online and to decide for themselves the level of those prices. In addition, TGA is instituting a wide-ranging competition compliance and training programme across its business.
Ann Pope, senior director for antitrust enforcement at the CMA, said: “The internet is an increasingly important distribution channel and people are held back from finding the best deal if retailers are prevented from advertising their prices online.
“Businesses of all sizes need to take competition law seriously. We will withdraw immunity from small businesses, exposing them to the risk of fines, if we think it is necessary – particularly where previous warnings have been ignored.”
TGA told AMP that to date no infringement had been found and stressed that it continues to co-operate fully with the CMA’s investigation. TGA’s full statement on the matter can be read HERE.
The CMA said it is considering its “next steps” in the ongoing investigation in light of TGA taking action to bring the restrictions to an end and to comply with competition law going forward.
The CMA has history of investigating the mobility sector for competition concerns, with its predecessor body carrying out a major formal investigation into certain suspected online restrictions back in 2012.
In August 2013 it ruled that Roma Medical Aids entered into arrangements with seven UK-wide online retailers which prevented them from selling Roma-branded mobility scooters online and from advertising their prices online. It directed all the parties concerned to bring the infringing arrangements to an end and to refrain from entering into the same or similar arrangements in the future.
In March 2014, the OFT announced that Pride Mobility Products and some of its retailers had infringed competition law regarding the sale of mobility scooters. Its investigations 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.
Again, the OFT ordered the parties to bring the arrangements to an end, where this had not already happened, and to refrain from entering into the same or similar arrangements in the future.