The Hungarian Competition Authority (GVH) has published a guide to inform businesses about the antitrust violation of resale price maintenance (RPM), which restricts competition among retailers and artificially inflates prices, ultimately harming consumers.

The guide aims to raise awareness among suppliers about problematic practices and provides detailed advice on how to maintain compliance with competition laws. It also assists retailers who may encounter such pricing agreements during negotiations with suppliers.

RPM is considered one of the most serious violations in both Hungarian and European competition law. Its detrimental effects on market competition include the elimination of independent pricing by retailers, higher product prices due to lack of price competition, decreased consumer demand, reduced market efficiency, and ultimately diminished consumer welfare.

The nature of the violation does not depend on the size of the supplier; both large companies and small and medium-sized enterprises can commit such violations. The GVH can establish a violation even if the price fixing was not enforced or was included in the contract by accident.

Key to evaluating a supplier's practices is whether the retailer's pricing freedom is maintained. There are scenarios where discussions about resale prices may not be deemed illegal, such as when prices are strictly recommended without pressure, when the supplier and retailer are under common ownership, or when maximum prices are set without minimum or fixed pricing.

The GVH advises suppliers to review their business practices to ensure they do not impose mandatory prices on retailers. If recommended prices are used, suppliers should allow retailers the freedom to deviate from them without facing sanctions or monitoring.

Suppliers who realize they have previously engaged in price fixing are encouraged to apply for leniency with the GVH, which may lead to reduced fines or complete immunity from penalties. Retailers, while often less powerful, can also be held accountable if they actively encourage or cooperate in price fixing.

The guide compiled by GVH investigators is available for free on the national competition authority's website.