On 10 June, the Competition Council (CC) adopted a decision in which it found that SIA Mirastyle, a wholesaler and retailer of lighting products, had entered into a cartel involving the fixing of resale prices to certain retailers who purchased products from SIA Mirastyle. At the same time, the CC found that SIA Mirastyle was engaged in market – more specifically project – division, including exchanges of commercially sensitive information with certain retailers on projects requiring the purchase of lighting equipment. In both cases, the prohibited agreement was found to have the objective of restricting competition in the lighting market in Latvia, for which the company was fined EUR 34 490.26.

SIA Mirastyle is the exclusive distributor of several lighting manufacturers in Latvia. At the wholesale level, SIA Mirastyle sells lighting products to retail, including online stores, while at the retail level, Mirastyle owns two stores, Gaismas maģija in Riga, as well as an online store www.gaismasmarket.lv, which delivers products throughout the European Union.

Resale pricing and project protection

In its Decision, the CC found that SIA Mirastyle had set the prices at which it could sell goods to end customers for at least two retailers who purchased goods from SIA Mirastyle. SIA Mirastyle sent emails to retailers stating: “Immediately make price adjustments in line with the Recommended Prices on the price lists”, otherwise they would be prohibited from distributing the goods in Latvia. As a result, these retailers were prevented from independently setting the retail prices of the different manufacturers of lighting items purchased from SIA Mirastyle, instead being given a higher price.

The CC also found that SIA Mirastyle exchanged commercially sensitive information with other retailers, which were also competitors of SIA Mirastyle, about the projects for which the lighting equipment was purchased; for example, information on the name or address of the facility was requested. If, as a result of this exchange of information, it was found that a retailer wishing to purchase lighting items from SIA Mirastyle had not developed a lighting design itself according to the customer’s wishes for a specific object, but that it had been developed by SIA Mirastyle or another company, the order was refused. Taking into account the fact that SIA Mirastyle is the exclusive distributor in Latvia for a large part of the brands it represents, in situations where there was a risk that the customer might purchase the lighting he was interested in from distributors outside Latvia, SIA Mirastyle approached the manufacturer in order to prevent the customer from purchasing the goods elsewhere. At the same time, the end customer was given the impression that the lighting design project was offered free of charge and that the customer was then free to choose where to buy the products. However, the customer could only buy the lighting products from the company that had prepared the lighting design project. The CC found that SIA Mirastyle had implemented market project division in this way.

Applicable fines

Given the fact that SIA Mirastyle was the initiator of the infringement, while its wholesale customers or retailers played a passive role and accepted the terms set by SIA Mirastyle because they would have otherwise been prevented from purchasing the goods from SIA Mirastyle in the case of resale prices or, in the case of project protection, would not have been supplied with the goods at all, the CC considers that only SIA Mirastyle is liable for the infringement in this case.

According to the Competition Law, the CC may impose a fine of up to 5% of the net turnover of a vertical agreement in its last financial year. In view of SIA Mirastyle’s cooperation with the CC during the investigation with regard to resale price fixing, a 10% reduction of the fine for this specific infringement has been imposed.

For the infringement of the competition law, the CC imposed a fine of EUR 34 490.26 on SIA Mirastyle.