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Press releases 2002 -

OFT fines Hasbro £4.95 million for price fixing for toys

Largest fine so far - reduced from £9m by leniency

PN 83/02    29 November 2002

The OFT has today fined toy manufacturer Hasbro £4.95 million for anti-competitive price fixing.

Download the full text of the decision in pdf format (221 kb).

Hasbro and 10 distributors (see note 1) broke competition law by entering into price-fixing agreements between early 2001 and July 2001. These agreements prevented the distributors from selling Hasbro toys and games below Hasbro's list price without permission. Such agreements infringe Chapter I of the Competition Act 1998, which came into force in March 2000.

Hasbro's penalty - the largest so far under the Competition Act - has been reduced under the OFT's leniency programme by 45 per cent. Without this reduction the fine would have been £9 million. Hasbro was granted leniency because it asked for it at an early stage of the investigation and co-operated fully.

No fines have been imposed on the distributors as the OFT found that the initiative to impose the prices was Hasbro's and the distributors had no choice but to accept them.

As regards the OFT's proposal to make a decision that Hasbro, Argos and Littlewoods have entered into agreements that infringe UK competition law, the OFT is considering the parties' oral and written representations. These will be taken fully into account before any final decision is made (see note 2).

NOTES

1. The 10 distributors are: Lewison Ltd, of Birmingham; A B Gee of Ripley Ltd, of Belper, Derbyshire; Sellicks (Plymouth) Ltd, of Devon; George Clapperton & Son Ltd, of Edinburgh; J A Magson Ltd, of York; L B Group Ltd, of Glasgow; Newswell Ltd t/a Kardwell Hobbs Distributors, of Basildon and Enfield; Williams of Swansea Ltd, of Swansea; Youngsters Ltd, of Wallingford, Oxfordshire; and Esdevium Games Ltd, of Aldershot.

2. OFT wrote to Hasbro, Argos, Littlewoods and the 10 distributors on 1 May 2002 saying that it proposed to make decisions that they had infringed competition law by entering into agreements to fix the price of Hasbro toys and games (see OFT press notice 24/02).

3. Powers under the Competition Act 1998
The Act gives the OFT the following powers to investigate suspected infringements of the Act's prohibitions and take preventive action where it finds that infringements have taken place:

i) the Chapter I prohibition prohibits agreements between undertakings, decisions by associations of undertakings or concerted practices which have the object or effect of preventing, restricting or distorting competition within the UK (or any part of it) and which may affect trade within the UK (or any part of it)

ii) the Chapter II prohibition prohibits conduct by one or more undertakings which amounts to the abuse of a dominant position in a market which may affect trade within the UK (or any part of it).

The OFT may impose a penalty of up to 10 per cent of UK turnover for a maximum of three years for infringement of either of the above prohibitions.

4. In this press release the functions of the Director General of Fair Trading (DGFT) under the Act are for simplicity described as the functions of 'the OFT'. The Enterprise Act will replace the office of the DGFT with the OFT, to which will be transferred the DGFT's functions.




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