Resale Price Maintenance (RPM) in Finland
Pursuant to the Finnish Competition Act (948/2011), RPM cases are assessed under the general prohibition on agreements distorting competition. According to Section 5 of the Competition
All agreements between undertakings, decisions by associations of undertakings, and concerted practices by undertakings which have as their object the significant prevention, restriction or distortion of competition or which result in a significant prevention, restriction or distortion of competition shall be prohibited. In particular, agreements, decisions, or practices which directly or indirectly fix purchase or selling prices or any other trading conditions […] shall be prohibited.
As the national law is, in practice, identical to Article 101 TFEU, the Finnish Competition and Consumer Authority (the FCCA) usually refers to the Vertical Block Exemption Regulation (VBER) and the Guidelines on vertical agreements in its decisions concerning RPM and other vertical restrictions pursuant to Section 5 of the Competition Act. No specific guidelines on RPM have been published by the FCCA. In general, the supplier is not allowed to impose fixed or minimum prices, but the use of maximum resale prices or recommended prices is not prohibited unless this actually leads to a minimum or fixed resale price. For Example, in case Kymppiposti Oy, the FCCA confirmed in 2004 that the imposition of maximum prices in promotional campaigns lasting up to two months was not prohibited under the Competition Act.
Cases on prohibited setting of minimum prices
In the early 2000s, the FCCA investigated several RPM cases but after the Iittala decision in 2011, cases became rare. In the said case, the Market Court found that Iittala, which is known for its glass items, other tableware and home décor products, fixed the minimum resale prices for a majority of its most well-known products, thereby preventing retailers from competing on price by lowering their own margins. A penalty payment of 3 million Euros was imposed on Iittala for the infringement. The FCCA did not propose fines for the retailers, although some of them were found to have agreed to the prohibited price-fixing, as the price-fixing was based on Iittala’s strategies and agreed upon by the retailers at least partly due to the pressure exerted by Iittala to adhere to this strategy.
In August 2022, the Market Court imposed a penalty payment of 1,7 million Euros on Isojoen Konehalli Oy (IKH), an importing and ironmongery company, for fixing retailers’ prices by prohibited resale price maintenance. IKH had set recommended resale prices, but the Market Court found that IKH had, in fact, required its retailers to apply at least recommended prices in
online sales. The representatives of IKH and authorized IKH retailers had discussed the recommended retail prices of IKH products and the margin accruing to the retailers in various parts of the IKH retail chain, and IKH had taken measures to limit and restrict retailers’ ability to determine their own resale prices below the recommended prices, such as removed discounts from a company, prohibited retailers from using the IKH trademark and, in one case, terminated the distribution agreement with a retailer. The Market Court found that the retail price maintenance was prohibited also in IKH’s own online platform where independent retailers had the possibility to sell IKH products (instead of setting up their own online store). As in the Iittala case, the FCCA did not find it necessary to propose fines for the retailers even if some of them had a role, e.g. in monitoring the other retailers’ compliance with the recommended prices.
In the context of a business relationship whose object is the resale of products, the supplier cannot impose a resale price to the distributor. The distributor – which is independent – must be entirely free to set its prices.
Regarding the French commercial code, RPM is prohibited on the basis of articles L. 442-6 and L. 420-1-2°.
Article L. 442-6 of the commercial code:
- “If any person imposes, directly or indirectly, a minimum on the resale price of a product or good, on the price of a service provision or on a trading margin, this shall be punished by a
fine of 15,000 Euros.”
In other words, whether or not free play of competition is affected, illegal RPM imposed by a manufacturer or a supplier on a distributor constitutes a restrictive practice.
Article L. 420-1-2° of the commercial code:
- “Common actions, agreements, express or tacit undertakings or coalitions, particularly when they are intended to: (…)
2° Prevent price fixing by the free play of the market, by artificially encouraging the increase or reduction of prices; (…)
shall be prohibited, even through the direct or indirect intermediation of a company in the group established outside France, when they have the aim or may have the effect of
preventing, restricting or distorting the free play of competition in a market.
Meaning, illegal RPM achieved through an agreement or concerted practice between the supplier and its distributor constitutes an anti-competitive practice when free play of competition is affected in the market.