BGH – Resale price maintenance is an unlawful restriction of competition
Resale price maintenance restricts competition and therefore usually constitutes a violation of antitrust law. This was reaffirmed by the Bundesgerichtshof (BGH), Germany“s Federal Supreme Court, in a ruling from October 17, 2017 (Az.: KZR 59/16).
In the case of resale price maintenance, manufacturers obligate their buyers to sell goods at a fixed price or not to go below a minimum price. We at the commercial law firm GRP Rainer Rechtsanwälte note that this generally constitutes a violation of the Gesetz gegen Wettbewerbsbeschränkungen (GWB), Germany“s Act against Restraints of Competition, and Art. 101 of the Treaty on the Functioning of the European Union (TFEU), according to which agreements that may affect trade between Member States are prohibited.
This was reaffirmed by the Bundesgerichtshof. In the case in question, a manufacturer of dietetic products that sold its goods in pharmacies, among other places, offered the pharmacies a 30 per cent discount provided they not undercut a certain retail price for the product. A center for protection against unfair competition brought an action against this practice. It considered the offer a minimum pricing agreement and thus a violation of the GWB and Art. 101 TFEU.
While the action for an injunction was successful at first instance, the Oberlandesgericht (OLG) Celle, Celle“s Higher Regional Court, overturned the ruling and dismissed the action. It argued that while the agreement on a lower price limit did represent resale price management and violated antitrust law, no appreciable restriction of competition could be established in the present case because the discount had a fixed term and was limited to a one-time purchase of 12 to 90 cans.
The BGH did not follow this line of reasoning and reaffirmed the ruling at first instance. The Cartel Panel held that the agreement on a minimum purchase price constituted an appreciable restriction of competition, reasoning that it leads to businesses being restricted in their freedom to set the retail price as they see fit. The Court went on to say that for the purposes of assessing whether a restriction of competition is appreciable, it does not come down to each individual intended agreement but rather their impact as a whole. The discount was found to have applied to the whole of Germany. As such, the potential order volume encompassed approx. 1.8 million cans subject to the relevant price restriction. The BGH concluded that this represented more than a minor restriction of competition.
Violations of antitrust or competition law can give rise to severe penalties. Lawyers who are experienced in the fields of antitrust and competition law can advise businesses.
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