Argos Ltd & Littlewoods Ltd v Office of Fair Trading
[2006] EWCA Civ 1318
Independent editorial summary — not the official judgment. Read the full judgment via the source link.
Ratio Decidendi
Price-fixing agreements between retailers facilitated by a supplier constitute horizontal concerted practices caught by the Chapter I prohibition, even when the communication passes through a vertical hub-and-spoke arrangement.
Facts
The OFT found that Argos and Littlewoods had fixed the prices of certain toys and games through Hasbro, the supplier. Hasbro acted as a conduit for retail pricing intentions between the two competing retailers. Both retailers appealed the OFT's infringement decision.
Judgment Summary
The Court of Appeal upheld the Competition Appeal Tribunal's decision, confirming that indirect price-fixing through a hub-and-spoke arrangement, where a supplier relays pricing intentions between competing retailers, amounts to a concerted practice under the Competition Act 1998. The court held that the essential element is whether confidential pricing information was exchanged with the knowledge or foresight that it would be shared with competitors.
Key Quotes
"It is not in dispute that there could be a trilateral or multilateral agreement or concerted practice between two or more customers and their common supplier, nor that this might come about by virtue of indirect contact between the customers via that supplier."
— Lloyd LJ at [31](verbatim, verified against the judgment)
"The proposition which, in our view, falls squarely within the _Bayer_ judgment in the ECJ and which is sufficient to dispose of the point in the present appeal can be stated in more restricted terms: if (i) retailer A discloses to supplier B its future pricing intentions in circumstances where A may be taken to intend that B will make use of that information to influence market conditions by passing that information to other retailers (of whom C is or may be one), (ii) B does, in fact, pass that information to C in circumstances where C may be taken to know the circumstances in which the information was disclosed by A to B and (iii) C does, in fact, use the information in determining its own future pricing intentions, then A, B and C are all to be regarded as parties to a concerted practice having as its object the restriction or distortion of competition."
— Lloyd LJ at [141](verbatim, verified against the judgment)
Subsequent Treatment
The hub-and-spoke doctrine has been consistently applied by the CMA in subsequent cartel investigations.
Applied in the dairy retail pricing investigation (2011) where supermarkets exchanged pricing information through dairy processors.
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