The Undertaking GARLAND Harmed Consumers, and It Now Faces a Fine of Almost CZK 100 Million

2022-01-04
In its first instance decision, the Office for the Protection of Competition (hereinafter referred to as ''the Office'') imposed a fine of CZK 96,751,000 on GARLAND distributor, s.r.o. for vertical agreements on resale price maintenance. This is the highest fine ever imposed for this type of anticompetitive conduct. The decision is not final and may be appealed.

According to the first-instance decision of the Office, the undertaking GARLAND committed an administrative offence by concluding and executing prohibited agreements with its customers on the direct fixing of resale prices in the period from at least 18 June 2013 to 6 June 2019, i.e. for almost 6 years. The aim of these agreements was to exclude competition between GARLAND's distributors in the markets for garden machinery, garden equipment and tools for home (hobby) use in the Czech Republic. The Office prohibited the execution of the above-mentioned agreements and imposed a fine of almost CZK 97 million on GARLAND. At the same time, it was also required to inform all its customers about the prohibition and the invalidity of the agreements.

By this conduct, GARLAND deliberately suppressed competition at the horizontal level between retailers of its goods. They were therefore prevented from offering these goods to end consumers at prices lower than those set by GARLAND. GARLAND itself initiated the price agreements, insisted on compliance with them and enforced them under threat of sanctions, such as blocking the customer's account in the ordering system. The enforcement of the price agreements by the undertaking GARLAND also led to customers themselves checking the possible non-compliance of other customers (their competitors) with the set retail prices and requesting GARLAND to provide remedies, i.e. to ensure unified (higher) retail prices.

As a result of this conduct, GARLAND distorted competition by eliminating price competition between retailers and maintaining a higher price level for the goods it distributed, clearly to the detriment of end consumers.    

Press Unit of the Office for the Protection of Competition
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