A HEAT PUMP MANUFACTURER IS SUSPECTED OF PRICE FIXING IN THE RESALE OF ITS PRODUCTS, THEREBY RESTRICTING COMPETITION BETWEEN DISTRIBUTORS

The Competition Council suspects that Iglu Tech, a manufacturer of heat pumps, has restricted competition among its distributors by fixing the resale prices of its products to be charged to the end-users by the companies that distributed heat pumps throughout Lithuania. The Statement of Objections (SO) was also sent to Axioma Servisas, which contributed to the alleged prohibited agreement, and to Unit Invest and Axioma LT, the parent companies, for a possible breach of the Law on Competition.

The Anti-competitive Agreements Investigation Group, which conducted the investigation, gathered sufficient evidence that Iglu Tech had entered into agreements with some of its distributors since June 2021, which stipulated not only the resale price levels of heat pumps but also the maximum discount rates allowed. Iglu Tech monitored the prices and discounts applied by distributors in online stores, sent warnings and requests to change the prices, and threatened to terminate the contracts if the products were sold at lower prices than those specified by the manufacturer. The company is also suspected of applying the same heat pump distribution conditions to some other companies selling the products, with whom it had not signed official distribution agreements but had cooperated.

The SO states that Axioma Servisas directly contributed to Iglu Tech's actions to maintain the price level of heat pumps throughout the distribution network, thereby avoiding competition between distributors. The joint strategy of the above companies may have led to higher prices of Iglu Tech's heat pumps for the end users.

The Anti-competitive Agreements Investigation Group proposes to recognise that not only the companies Iglu Tech and Axioma Servisas, but also the holding companies Unit Invest and Axioma LT have violated the Law on Competition. It is proposed to impose liability on the latter for the actions carried out by the subsidiaries. 

The Law on Competition establishes joint liability for companies forming a single economic unit. The holding company, as well as other entities comprising the economic unit, are jointly liable for the actions of their subsidiaries that violate the law.

The interested parties, after having taken into consideration the information collected and the assessment carried out by the Authority's investigators, have the right to submit their arguments in writing to the Council and to make an oral presentation at the hearing before the Competition Council adopts a final decision on the possible infringement and imposes financial penalties.

The SO does not constitute a final decision of the Competition Council and in no way restricts the right of the Competition Council to arrive at a different conclusion in the final decision than that proposed in the Group's Statement.

In order to conduct an investigation efficiently and make rational use of available resources, in this case, the investigation was carried out against the actions of goods supplier and the related companies.