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The OFT today issued a Statement of Objections to a manufacturer of sports bras and three UK department stores alleging that they have infringed competition law by entering into resale price maintenance agreements that set a fixed or minimum resale price on a brand of sports bras.

The OFT has alleged that DB Apparel UK Limited ('DBA') entered into a total of nine anti-competitive agreements with John Lewis plc, Debenhams Retail plc and House of Fraser (Stores) Limited between 2008 and 2011. These alleged agreements had the aim of increasing the retail prices of DBA's Shock Absorber brand of sports bras in each of the three department stores. The alleged agreements applied on a nationwide basis to numerous products within the Shock Absorber range. During the period in question DBA's Shock Absorber range of sports bras was one of the leading UK brands with a share of approximately 15 per cent of the market.

The OFT's provisional view is that each of the agreements amounted to resale price maintenance, a serious infringement of competition law. Resale price maintenance occurs when a supplier specifies the resale price of the product to retailers and the retailers agree to the price set.

Ann Pope, OFT Senior Director of Services, Infrastructure and Public Markets at the OFT, said: 'The OFT takes allegations of price-fixing seriously. Resale price maintenance limits competition between retailers and can lead to consumers paying higher prices.'

'No assumption should be made at this stage that there has been an infringement of competition law. We will carefully consider the parties' representations to the Statement of Objections before deciding whether competition law has in fact been infringed.'

NOTES

1. The Chapter I prohibition of the Competition Act 1998 covers, among other matters, anti-competitive agreements and/or concerted practices which have as their object or effect the prevention, restriction or distortion of competition in the UK or a part of it and which may affect trade in the UK or a part of it. Article 101 of the Treaty on the Function of the European Union (TFEU) covers equivalent agreements and concerted practices which may affect trade between EU Member States.
2. This case relates to resale price maintenance. The OFT considers that an agreement between a supplier and a retailer which specifies a fixed or minimum resale price is a form of price fixing agreement, which typically has as its object the restriction of competition. Such agreements will infringe the Chapter I prohibition of the Competition Act 1998 and/or Article 101 of the TFEU, unless an exemption applies. Agreements relating to maximum resale prices and/or suggestions by suppliers of recommended retail prices will not usually infringe competition law, unless their effect is to fix prices and dampen price competition.
3. Any business found to have infringed the Competition Act 1998 and/or the TFEU could be fined up to 10 per cent of its annual worldwide turnover. In calculating financial penalties, the OFT takes into account a number of factors including seriousness of the infringement(s), turnover in the relevant market and any mitigating and/or aggravating factors.
4. The Statement of Objections is addressed to the following companies, which the OFT considers were either directly involved in the alleged infringements and/or are liable as parent companies of the companies directly involved, in relation to the following alleged infringements:
   
   - DB Apparel UK Limited and DB Apparel SAS: this is in relation to nine alleged infringements of the Chapter I prohibition and/or Article 101 of the TFEU between 2008 and 2011.
   
   - Debenhams Retail plc and Debenhams plc: this is in relation to three alleged infringements of the Chapter I prohibition and/or Article 101 of the TFEU between 2009 and 2011.
   
   - House of Fraser (Stores) Limited and House of Fraser Limited: this is in relation to three alleged infringements of the Chapter I prohibition and/or Article 101 of the TFEU between 2009 and 2011.
   
   -  John Lewis plc and the John Lewis Partnership plc: this is in relation to three alleged infringements of the Chapter I prohibition and/or Article 101 of the TFEU between 2008 and 2011.
5. A Statement of Objections gives notice of a proposed infringement decision under the Competition Act 1998 to the parties involved. The parties then have the opportunity to make written and oral representations to the case set out by the OFT. Such representations will be considered by the OFT before any final decision is made.
6. The Statement of Objections will not be published. In accordance with the OFT's guidance on Involving third parties in Competition Investigations (pdf 289kb), any person who wishes to comment on the OFT's provisional findings, and who is in a position materially to assist the OFT in testing its factual, legal or economic arguments, may request a non-confidential version of the Statement of Objections by contacting the OFT no later than Friday 4 October.
7. For more information see the case page for this investigation.
8. The OFT currently has 14 cases open under the Competition Act 1998.