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UOKiK imposed a fine on Karcher. The company allegedly artificially inflated prices for more than 20 years

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The President of the Office of Competition and Consumer Protection imposed a fine of PLN 26 million on Karcher. The selling prices of cleaning equipment and systems have been artificially inflated for over 20 years.

UOKiK indicated in a Wednesday announcement that the issued decision concerns the Karcher company operating in Poland, belonging to a capital group that produces cleaning devices. “The collected evidence shows that since the late 1990s, the entrepreneur, in consultation with his distributors, set minimum and fixed retail prices for products. These were equipment for home and professional use, e.g. washers, high-pressure devices, vacuum cleaners, mops, sweepers, electric brushes, polishers or carpet cleaners.

“It’s a disturbing thing”

The information provided by the office shows that “until 2005 the company imposed product prices on its sales networks both in stationary sales and on the Internet”. “After 2005, prices were mainly determined in online stores” – added.

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– For over 20 years, it was impossible to buy products of the popular Karcher brand in Poland cheaper than at the prices imposed from above. This is an appalling issue primarily due to the duration of the market collusion. The agreement initially concerned brick-and-mortar stores, and then online sales, said President of UOKiK Tomasz Chróstny.

The Office stated that the written contracts concluded by Karcher with distributors and the general terms and conditions of commercial cooperation contained, among others, provisions according to which distributors had the right to price products only on terms set by Karcher. “This means that buyers of Kaercher products could not buy them cheaper than at prices imposed from above. Entrepreneurs who sold products at lower prices were punished with receiving discounts, depriving them of marketing support, and in extreme cases it was even possible to terminate cooperation agreements” – we read. in the message.

According to UOKiK, some sellers actively participated in the process of disciplining the rest of the entities, informing Karcher about lower prices.

UOKiK imposed a fine on Karcher

Tomasz Chróstny, President of UOKiK, imposed a fine of PLN 26 million on Karcher for participating in an agreement restricting competition. “It would have been significantly higher, but the entrepreneur took advantage of the leniency program. He admitted to breaking the law and cooperated with UOKiK at the stage of the proceedings. He also provided previously unknown information and evidence, including the duration of the collusion and products whose prices were imposed from above,” it was noted.

The Office informed that Karcher initially submitted an application to join the procedure of voluntary submission to the penalty, “however, after learning about the amount of the penalty, it withdrew from this procedure”. In the opinion of UOKiK, “such action suggests that, despite the existence of irrefutable evidence for the conclusion of the agreement, the company plans to appeal against the decision to the competent court.”

“At the same time, the company did not obtain a waiver of the financial sanction. It urged other entrepreneurs to participate in the agreement, and the information held by the President of UOKiK before submitting the leniency application allowed for the initiation of antimonopoly proceedings also without the company’s cooperation” – added.

We have sent questions to Karcher about this.

Main photo source: Shutterstock

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