The Hungarian Competition Authority (GVH) has imposed a fine of over 68 million HUF on Hair-Line Kft., a well-known domestic distributor of hairdressing products, for engaging in anti-competitive practices. The company was found to have restricted resale prices and implemented territorial limitations within its distribution system.

The investigation, initiated in 2022, revealed that Hair-Line employed vertical price fixing for certain products and imposed geographical restrictions on passive sales. This practice significantly limited competition in the professional hairdressing products market.

Hair-Line operated a multi-tier distribution system in Hungary, where its products were sold by representatives with territorial exclusivity to professional users, primarily hair salons, and retail partners. The GVH's findings indicated that between 2018 and 2022, the company dictated the prices at which its representatives could sell products to salons and restricted the geographical area for passive sales.

During the proceedings, Hair-Line acknowledged the infringement and committed to implementing a comprehensive compliance program. The GVH will monitor the execution of these commitments through follow-up investigations. Considering the company's cooperation, the GVH ultimately imposed a fine of 68.5 million HUF.

The GVH emphasizes the seriousness of vertical competition restrictions, such as resale price maintenance, which can diminish or eliminate price competition among retailers, negatively impacting consumers and the market as a whole. Businesses are advised to exercise caution in their sales practices to avoid legal violations.