IBVTA guidance on competition law
The IBVTA regularly issues reminders on competition law, in order that our members’ businesses and the wider vaping sector are aware of the law. This is especially important as new businesses enter the marketplace.
Competition law is designed to protect businesses and consumers from anti-competitive behaviour. The law safeguards effective competition between businesses, and maintains a competitive marketplace, which in turn benefits consumers. All businesses must comply with competition law and there can be serious consequences for businesses and individuals, including directors, for non-compliance.
Attempting to fix prices or maintain prices is illegal for both suppliers and sellers, and carries stiff penalties. If you receive a communication about maintaining/fixing prices, please be aware that if you enter into a dialogue you could be breaking the law.
The CMA (Competition & Markets Authority) is the independent non-ministerial department which regulates and is the principal enforcement authority in the UK to enforce competition laws.
There are specific guides to competition law which businesses should be aware of:
RPM is where a supplier and a retailer agree that the retailer will not resell the supplier’s products below a specified price.
Price-fixing: guidance for online sellers: https://www.gov.uk/government/publications/price-fixing-guidance-for-online-sellers/price-fixing-guidance-for-online-sellers
Price-fixing includes agreeing with a competitor what price you will charge your customers. It can also include agreements not to sell below a minimum price, or simply agreeing not to undercut a competitor.
The guide ‘How to comply with competition law’ also includes other aspects of the law surrounding cartels, dominant position and other potentially anti-competitive agreements. It gives businesses a four-step process to tackle the specific risks they face, as well as advising what company directors need to do, and what to do if you think competition law has been broken:
There is also a downloadable ‘at a glance guide’ which is useful: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/477569/SME_Compliance_At-A-Glance.pdf
This Competition law risk: a short guide gives further information, and outlines the risks to a business of breaking competition law, which include:
- Fines on the business
- Director disqualification.
- Reputational damage
- Prison and criminal fines for individuals involved
For more information, please visit the CMA website: https://www.gov.uk/government/organisations/competition-and-markets-authority