In depth
Lutec is active in the wholesale sale of outdoor and indoor lamps and light bulbs in Hungary since 2015, it does not engage in retail activities. The investigation was launched because the HCA found that Lutec had fixed the gross recommended retail prices for lamps and light bulbs used preliminary in homes for its resellers specializing in the retail sale of such products and threatened to impose sanctions on resellers who advertised or sold products at prices below these recommended price levels. The HCA found that Lutec in particular:
- Regularly communicated the expected fixed or minimum retail prices to its reseller partners by circular emails.
- Called on its reseller partners to apply the recommended retail prices in practice on multiple occasions.
- Launched central promotional campaigns, during which it expected its partners to respect the fixed resale prices and not to offer additional discounts to consumers.
- Outside those promotional periods, it expected its partners to apply discounts of max. 5 %, in such a way that the gross retail prices displayed to consumers remained unchanged.
The HCA established that Lutec received feedback from its reseller partners about other resellers' compliance with the fixed resale prices. In the event of non-compliance, Lutec repeatedly reminded retailers to respect the prices and discounts and has imposed various sanctions for non-compliance:
- Requiring retailers to apply the prices; failing which
- Requiring retailers to withdraw products from their offers; failing which
- Threatened with the refusal to supply goods.
The HCA found that the anti-competitive conduct was aimed at setting a uniform minimum consumer (retail) price level for Lutec's products and was intended to reduce competition between retailers. The emails discovered during the investigation explicitly mentioned that the scheme was intended to avoid a "price war" between retailers. The fixing of resale prices (RPM) constitutes a restriction of competition by object and is in any event prohibited, i.e., such infringements are not covered by the de minimis exemption or any other exemption.
In imposing the fine, the HCA considered as aggravating circumstances that
- The infringing conduct falls within the category of infringements which seriously threaten competition.
- Lutec engaged in the conduct continuously for a long period (almost four years).
- Lutec threatened to impose penalties in the event of non-compliance of retailers with the RPM-scheme.
The HCA took into account the size (microenterprise) and financial capacity of Lutec as mitigating circumstances. The HCA also took into account the fact that Lutec had submitted a leniency application that provided significant added value for the collection of evidence, had participated in a settlement procedure and had undertaken to implement an ex-post compliance programme. Based on the above, the HCA applied a total reduction of 70 %, resulting in a fine of HUF 13.5 million.
