Gifts Today magazine

CMA fines online seller cartel

Two sellers agreed to use automated repricing software to avoid undercutting each other’s prices on Amazon Marketplace

The Competition and Markets Authority has fined an online trader of licensed posters after it used automated repricing software to implement an illegal cartel with one of its competition.

Trod Limited has admitted agreeing with competing online seller GB eye Limited, trading as GB Posters, that they would not undercut each other’s prices for posters and frames sold on Amazon’s UK website. The agreement used automated repricing software which the parties each configured to be mutually beneficial. 

The cartel applied to posters and frames sold by both parties on Amazon Marketplace through Amazon’s UK website from 24 March 2011 at the latest to 1 July 2015 at the earliest. 

Following an investigation by the CMA, Trod has agreed to accept a fine of £163,371 for taking part in the cartel. This is after deducting a 20% discount to reflect the resource savings to the CMA as a result of Trod’s admission and co-operation with the CMA’s investigation.

Provided it continues to co-operate and complies with the other conditions of the CMA’s leniency policy, GB eye will not receive a fine, having reported the cartel to the CMA and cooperated with the investigation, in accordance with the CMA’s leniency policy.

Amazon itself was not involved in the cartel and has not been investigated by the CMA.

Stephen Blake, Senior Director and head of the CMA’s Cartels and Criminal Group, said: “The internet is an increasingly important way in which people buy products or services in their everyday lives. Online marketplaces such as Amazon allow sellers to sell their goods directly to consumers, who often benefit from more choice and lower prices as a result. Online pricing tools, such as automated repricing software, can also help sellers compete better, for the benefit of consumers. In this case, however, the parties used repricing software to implement an illegal agreement to deny consumers these benefits.

“Sellers on online platforms need to be aware that agreeing with each other to limit price competition in this way is illegal and can have serious consequences for the companies and individuals involved. The CMA is committed to tackling such anti-competitive behaviour, which jeopardises online markets and consumer trust in e-commerce.”

The CMA says making sure online and digital markets are working effectively is a particular priority for it.

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