Office for the Protection of Competition imposed fine of CZK 9.9 million on K + B Progres for fixing prices for retailers

The Office for the Protection of Competition issued a decision to impose a fine of CZK 9,904,000 on K + B Progres, a.s., for infringement of national and EU competition rules. The company was found guilty of negotiating and implementing prohibited vertical agreements on price fixing for the resale of electrical appliances. The decision became final in the first instance, as the party to the proceedings did not file an appeal against it.

K + B Progres is a leading distributor of consumer electronics and owner of the ECG brand of household appliances. It distributes several well-known brands of electrical appliances on the Czech market. K + B Progres has a controlling stake in the companies Expert ČR and Elektrocentrum, s.r.o.

According to the decision of the Office, K + B Progres engaged in anti-competitive conduct between 2018 and June 2023 by setting minimum retail prices for its customers, monitoring compliance with these prices, and imposing sanctions in the event of violations. This conduct distorted competition in the markets for small and large domestic appliances and consumer electronics in the Czech Republic. The company's conduct could affect trade between EU Member States, and therefore a violation of EU competition law was also included in the decision.

When determining the amount of the fine, the Office considered the gravity and duration of the infringement. Given that the party to the proceedings fully cooperated with the Office during the investigation, including submitting a leniency application, fulfilling the conditions for settlement, and introducing a competition compliance programme, the fine was significantly reduced to CZK 9,904,000.

In anti-competitive vertical agreements on resale price maintenance, the supplier or distributor of goods prohibits retailers from selling its goods at a price lower than that set by the supplier. This leads to artificial price uniformity for the goods in question and to higher prices for consumers. In recent years, the Office has imposed high fines for such practices, particularly in the areas of electrical appliances and dog and cat food. A few weeks ago, the European Commission also imposed sanctions amounting to tens of millions of euros on three major fashion brands for the same type of anti-competitive conduct, emphasizing that setting prices to retailers is unacceptable.

 

Press Unit of the Office
25/208 - S0543/2023