The Backpack Manufacturer TOPGAL Entered Into Prohibited Price Agreements and Has to Pay More Than CZK 10 Million for Restricting Retailers

2023-10-25
The Office for the Protection of Competition (hereinafter referred to as "the Office") imposed a fine of CZK 10,748,000 on TOPGAL a.s., a manufacturer of backpacks and briefcases, for entering into prohibited vertical agreements on resale price fixing. No appeal was lodged against the first-instance decision and the decision has already become final.

The undertaking TOPGAL set minimum retail prices to its customers for sales to final consumers in the period from 17 March 2014 to 18 May 2021. TOPGAL made business cooperation with customers conditional on compliance with set price, checked whether customers complied with the prices and eventually urged them to increase prices to the level set, even under the threat of sanctions, which in some cases was actually applied.

The undertaking TOPGAL concluded and implemented prohibited agreements with its customers on direct resale price fixing aimed at and resulting in distortion of competition in the Czech Republic on the market for school and leisure backpacks and briefcases and related school supplies. This conduct resulted in an infringement of the Competition Act between 17 March 2014 and 18 May 2021.

When imposing the fine, the Office took into account the gravity of the anticompetitive conduct but also the fact that it lasted for more than 7 years. As mitigating circumstances, the Office considered the voluntary refraining from the anticompetitive conduct immediately after the on-site inspection and informing the customers that the fixed sales prices were not binding. TOPGAL complied with the conditions for a settlement under which it accepted liability for the committed offence, and, thus, resulting in a reduction of the fine.

The setting of minimum prices by suppliers of goods restricts price competition between retailers, and, thus, increases the price level of goods for consumers. Retailers are free to set the selling price of goods and shall not be restricted in their pricing by the supplier. The wholesale supplier of goods may only set a recommended price but shall not enforce compliance with it.

Press Unit of the Office
23/0148 – S0219/2021

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