Following the receipt of an anonymous complaint,the Italian Competition Authority (“ICA”) decided on 22nd October 2013, to open an in-depth investigation into Power-One Italy S.p.A. (“Power-One”) for alleged Resale Price Maintenance.
Power-One is part of the Power-One Inc. Group which is one of the largest suppliers of power inverters which are supplied to power manufacturers throughout the world. A power inverter is a device used to convert direct current into alternating current.
The anonymous complainant attached a letter in their complaint to the ICA headed “Minimum selling price” in which the Vice-President of Power-One reminded all its distributors, resellers and partners that they were under an obligation to apply the minimum reselling price provided for by the Power- One’s price lists.
Moreover, it was expressly stated that “ignoring this indication [Minimum selling price] will result in the interruption of the business relationship with Power-One”.
ICA confirmed that, irrespective of the market share of the parties concerned, Resale Price Maintenance Agreements (“RPMAs”) are considered hardcore restrictions under the Vertical Agreements Block Exemption and serious restrictions of competition by object contrary to Article 101(1) of TFEU. There is no need to undertake an economic assessment to ascertain the effects of such behavior on competition.
The only way such behavior could be regarded as permissible is if the undertaking concerned was able to prove that they would be entitled to an individual exemption pursuant to Article 101(3) TFEU. However as the ICA pointed out that it is extremely unlikely that any pro-competitive effects of RPMAs would overcome the profound anti-competitive effects of an RPM strategy. Secondly, this type of behavior is viewed as sufficiently serious that even the de minimis rule (where the anti-competitive effect is small enough not to warrant sanctions) cannot be applied.
This is an interesting case because it shows that even an anonymous complaint is able to trigger an in-depth investigation by ICA. The case is likely to serve as a high profile reminder to companies to avoid setting and enforcing minimum resale prices, as these are contrary to EU and national competition laws. Companies can instead use alternative and legitimate pricing strategies such as setting maximum retail prices or using recommended retail prices to support their distributors in intrabrand competition.